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EXHIBIT 10.11
EXECUTION COPY
C R E D I T A N D S E C U R I T Y A G R E E M E N T
This Credit and Security Agreement (as it may from time to time be
amended, restated or otherwise modified, the "Agreement") is made effective as
of the 2nd day of April, 1998, between AIRCRAFT SERVICE INTERNATIONAL GROUP,
INC., a Delaware corporation, 0000 X.X. 00 Xxxxxxx, #000, Xxxxx, Xxxxxxx
00000-0000 ("Borrower"), and KEY CORPORATE CAPITAL INC., an affiliate of KeyBank
National Association, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000 ("Lender").
WITNESSETH:
WHEREAS, Borrower and Lender desire to contract for the establishment
of credits in the aggregate principal amounts hereinafter set forth, to be made
available to Borrower upon the terms and subject to the conditions hereinafter
set forth;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"Account" shall mean (a) any right to payment now or hereafter owing to
a Company (including but not limited to any such right to payment by reason of
any lease, sale, manufacture, repair, processing or fabrication of personal
property formerly, now or hereafter owned or otherwise held by such Company, by
reason of any services formerly, now or hereafter rendered by or on behalf of
such Company or by reason of any former, existing or future contract for any
such lease, sale, manufacture, repair, processing, fabrication and/or services),
whether such right to payment be classified by law as an instrument, chattel
paper, contract right, account, document, general intangible or otherwise; (b)
the security, if any, for such right to payment; (c) a Company's right, title
and interest (including, without limitation, all of such Company's rights as an
unpaid vendor, and any applicable right of stoppage in transit) in or to the
personal property, if any, which is the subject of such rights to payment; (d)
all books and records pertaining to such rights to payment; and (e) all proceeds
of any of the foregoing, irrespective of the form or kind thereof.
"Account Debtor" shall mean any Person obligated to pay all or any part
of any Account in any manner and includes (without limitation) any Guarantor
thereof.
"Acquisition" shall mean the acquisition of all of the shares of stock
of the "Companies" (as defined in the Share Purchase Agreement) by Borrower and
ASIG Europe Limited pursuant to the terms of the Share Purchase Agreement.
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"Applicable Margin" shall mean:
(a) for the period from the Closing Date through the
fiscal quarter ending June 30, 1999, one hundred seventy-five (175)
basis points for LIBOR Rate Loans and zero (0) basis points for Prime
Rate Loans; and
(b) commencing with the financial statements for the
fiscal quarter ending March 31, 1999, the number of basis points
(depending upon whether Loans are LIBOR Loans or Prime Rate Loans) set
forth in the following matrix based on the result of the computation of
the Leverage Ratio for the most recently completed fiscal quarter shall
be used to establish the number of basis points that will go into
effect on July 1, 1999 and thereafter:
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LEVERAGE RATIO APPLICABLE BASIS APPLICABLE BASIS
POINTS FOR LIBOR POINTS FOR PRIME
LOANS RATE LOANS
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Greater than 6.00 to 1.00 225 50
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Greater than or equal to 5.50 to 1.00 but less than 6.00 to 1.00 200 25
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Greater than or equal to 5.00 to 1.00 but less than 5.50 to 1.00 175 0
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Greater than or equal to 4.50 to 1.00 but less than 5.00 to 1.00 150 0
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Less than 4.50 to 1.00 125 0
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Changes to the Applicable Margin shall be effective on the first day of
each fiscal quarter following the date upon which Lender received, or, if
earlier, Lender should have received, pursuant to Section 5.3(a) hereof, the
financial statements of the Companies for Borrower's fiscal quarters. The above
matrix does not modify or waive, in any respect, the requirements of Section 5.7
hereof, the rights of Lender to charge the Default Rate, or the rights and
remedies of Lender pursuant to Articles VIII and IX hereof.
"Asset Acquisition" shall mean (a) an Investment by a Company or any
Group Member in any other Person pursuant to which such Person shall become a
Group Member or shall be merged with or into a Company or any Group Member or
(b) the acquisition by a Company or any Group Member of the assets of any Person
(other than a Group Member) which constitute all or substantially all of the
assets of such Person or any other properties or assets of such Person other
than in the ordinary course of business.
"Asset Sale" shall mean the sale, transfer or other disposition
(including any sale and leaseback transaction), other than to Borrower or any of
its Wholly-Owned Subsidiaries, in any single transaction or series of related
transactions having a fair market value in excess of Two Hundred Thousand
Dollars ($200,000), of (a) any Capital Stock of or other equity interest in any
Group Member, or (b) any other property or assets of Borrower or of any Group
Member thereof;
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provided that Asset Sales shall not include (i) sales, leases, conveyances,
transfers or other dispositions to Borrower or to a Wholly-Owned Subsidiary or
to any other Person if after giving effect to such sale, lease, conveyance,
transfer or other disposition such other Person becomes a Wholly-Owned
Subsidiary; (ii) the contribution or other transfer of any assets or property to
a joint venture, partnership or other Person (which may be a Subsidiary) in
which Borrower has a direct or indirect interest; or (iii) the sale, transfer or
other disposition of all or substantially all of the assets of Borrower or any
of its Wholly-Owned Subsidiaries as permitted under Section 5.12.
"Borrower's Certificate" shall mean a certificate detailing the
calculation of the Borrowing Base, in form and substance satisfactory to Lender.
"Borrowing Base" shall mean an amount not in excess of the sum of
eighty-five percent (85%) of the amount due and owing on Eligible Accounts
Receivable and zero percent (0%) on Inventory; provided, however, that anything
herein to the contrary notwithstanding, Lender shall at all times have the right
to modify or reduce such percentages from time to time, in its reasonable
discretion.
"Business Day" shall mean a day of the year (excluding Saturdays and
Sundays) on which banks are not required or authorized to close in Cleveland,
Ohio, or Miami, Florida, and, if the applicable Business Day relates to any
LIBOR Loan, on which dealings are carried on in the London interbank eurodollar
market.
"Capital Distribution" shall mean a payment made, liability incurred or
other consideration given for the purchase, acquisition, redemption or
retirement of any capital stock of any Company or as a dividend, return of
capital or other distribution (other than any stock dividend or stock split
payable only in capital stock of the Company in question) in respect of any
Company's capital stock.
"Capital Expenditures" shall mean, for any period, the amount of
capital expenditures as determined on a Consolidated basis and in accordance
with GAAP.
"Capital Stock" shall mean, with respect to any Person, any and all
shares or other equivalents (however designated and whether or not voting) of
capital stock, partnership interests or any other participation, right or other
interest in the nature of an equity interest in such Person or any option,
warrant or other security convertible into or exercisable for any of the
foregoing.
"Capitalized Lease Obligations" shall mean Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Cash Collateral Account" shall mean a commercial Deposit Account
designated "cash collateral account" and maintained by Borrower with KeyBank,
without liability by KeyBank or Lender to pay interest thereon, from which
account Lender shall have the exclusive right to withdraw funds until all of the
Debt is paid in full.
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"Cash Equivalents" shall mean (i) marketable direct obligations of the
United States of America or any agency thereof, or obligations guaranteed or
insured by the United States of America; provided that in each case such
obligations mature within one year from the date of acquisition thereof, (ii)
certificates of deposit maturing within one year from the date of creation
thereof issued by any U.S. national or state banking institution having capital,
surplus and undivided profits aggregating at least Two Hundred Fifty Million
Dollars ($250,000,000) and at the time of investment rated at least A-1 by S&P
and P-1 by Xxxxx'x, (iii) commercial paper with a maturity of one hundred eighty
(180) days or less issued by a corporation (except an affiliate of Borrower)
organized under the laws of any state of the United States of America or the
District of Columbia and at the time of investment rated at least A-1 by S&P or
at least P-1 by Xxxxx'x, (iv) repurchase agreements and reverse repurchase
agreements relating to marketable direct obligations issued or unconditionally
guaranteed by the United States of America or issued by an agency thereof and
backed by the full faith and credit of the United States of America, in each
case maturing within one year from the date of acquisition; provided that the
terms of such agreements comply with the guidelines set forth in the Federal
Financial Agreements of Depository Institutions with Securities Dealers and
Others, as adopted by the Comptroller of the Currency, and (v) tax-exempt
auction rate securities and municipal preferred stock, in each case, subject to
reset no more than thirty-five (35) days after the date of acquisition and
having a rating of at least AA by S&P or Aa by Xxxxx'x at the time of
investment.
"Cash Security" shall mean all cash, instruments, Deposit Accounts, and
other cash equivalents, whether matured or unmatured, whether collected or in
the process of collection, upon which Borrower presently has or may hereafter
have any claim, wherever located, including but not limited to any of the
foregoing that are presently or may hereafter be existing or maintained with,
issued by, drawn upon, or in the possession of KeyBank or Lender, in each case
only to the extent relating to the Collateral.
"Closing Date" shall mean the effective date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
together with the rules and regulations promulgated thereunder.
"Collateral" shall mean (a) all of Borrower's existing and future
Accounts, accounts receivable, contract rights, General Intangibles, instruments
and chattel paper in each case relating to the Accounts; (b) all of Borrower's
Inventory, whether now owned or hereafter acquired by Borrower; (c) all funds
now or hereafter on deposit in the Cash Collateral Account, if any; (d) all of
Borrower's existing and future Cash Security; and (e) all of the Proceeds,
products, profits, and rents of any of (a) through (d) above, in each case to
the extent set forth in the applicable Loan Documents. The definition of
Collateral shall exclude any items which are not assignable pursuant to the
terms of any agreement or require the consent of any other party or are
prohibited by law.
"Commitment" shall mean the obligation hereunder of Lender to make
Loans, and to issue Letters of Credit, pursuant to the Revolving Credit
Commitment up to an aggregate principal amount outstanding at any one time of
Ten Million Dollars ($10,000,000), or such lesser amount as shall be determined
pursuant to Section 2.5 hereof.
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"Commitment Period" shall mean the period from the Closing Date to
August 31, 2002, or such earlier date on which the Commitment shall have been
terminated pursuant to Article IX hereof.
"Company" shall mean Borrower or a Subsidiary.
"Companies" shall mean Borrower and all Subsidiaries.
"Compliance Certificate" shall mean a certificate, substantially in the
form of the attached Exhibit C.
"Computer System" shall mean a computer system and all related
peripherals, including, but not limited to, hardware, software, devices and
systems.
"Consolidated" shall mean the resultant consolidation of the financial
statements of Borrower, its Subsidiaries and Restricted Joint Ventures in
accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, for any Person on a
Consolidated basis and in accordance with GAAP, an amount equal to (a) the sum
of (i) Consolidated Net Income for such period, plus (ii) the provision for
taxes for such period based on income or profits to the extent such income or
profits were included in computing Consolidated Net Income and any provision for
taxes utilized in computing net loss under clause (i) hereof, plus (iii)
Consolidated Interest Expense for such period (but only including Redeemable
Dividends in the calculation of such Consolidated Interest Expense to the extent
that such Redeemable Dividends have not been excluded in the calculation of
Consolidated Net Income), plus (iv) depreciation for such period on a
consolidated basis, plus (v) amortization of intangibles for such period on a
consolidated basis, plus (vi) any other non-cash items reducing Consolidated Net
Income for such period, minus (b) all non-cash items increasing Consolidated Net
Income for such period, all for such Person and its Subsidiaries determined in
accordance with GAAP, except that with respect to Borrower each of the foregoing
items shall be determined on a consolidated basis with respect to Borrower and
its Group Members only; provided, however, that, for purposes of calculating
Consolidated EBITDA during any fiscal quarter, cash income from a particular
Investment (other than in a Subsidiary which under GAAP is consolidated or a
Restricted Joint Venture) of such Person shall be included only (x) to the
extent cash income has been received by such Person with respect to such
Investment, or (y) if the cash income derived from such Investment is
attributable to Temporary Cash Investments. In connection with any material
Asset Acquisition contemplated by a Company, Lender hereby agrees to give fair
consideration to, and to negotiate in good faith with respect to, an adjustment
to the calculation of Consolidated EBITDA for the purposes of calculating the
Applicable Margin and the Leverage Ratio to give effect on a pro forma basis to
such Asset Acquisition as if such Asset Acquisition had occurred on the first
day of the relevant test period.
"Consolidated Interest Expense" shall mean, with respect to any Person,
for any period, the aggregate amount of interest which, in conformity with GAAP
(without taking into account interest incurred by Permitted Joint Ventures),
would be set forth opposite the caption "interest
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expense" or any like caption on an income statement for such Person and its
Group Members on a consolidated basis (including, but not limited to, (i)
imputed interest included in Capitalized Lease Obligations, (ii) all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (iii) the net costs associated with
hedging obligations, (iv) amortization of other financing fees and expenses, (v)
the interest portion of any deferred payment obligation, (vi) amortization of
discount or premium, if any, and (vii) all other non-cash interest expense
(including PIK Interest) (other than interest amortized to cost of sales)) plus,
without duplication, all net capitalized interest for such period and all
interest paid under any guarantee of Indebtedness (including a guarantee of
principal, interest or any combination thereof) of any Person, plus the amount
of all dividends or distributions paid on Disqualified Capital Stock (other than
dividends paid or payable in shares of Capital Stock of a Company), less the
amortization of deferred financing costs and excluding, however, any amount of
such interest of any Group Member if the net income of such Group Member is
excluded in the calculation of Consolidated Net Income pursuant to clause (a) or
(f) of the definition thereof (but only in the same proportion as the net income
of such Group Member is excluded from the calculation of Consolidated Net Income
pursuant to clause (a) or (f) of the definition thereof).
"Consolidated Net Income" shall mean, with respect to any Person, for
any period, the aggregate amount of the Net Income of such Person and its Group
Members for such period, on a consolidated basis, determined in accordance with
GAAP; provided, however, that (a) the Net Income of (i) any Person (the "other
Person") in which the Person in question or any of its Group Members has less
than a one hundred percent (100%) interest (which interest does not cause the
Net Income of such other Person to be consolidated into the net income of the
Person in question in accordance with GAAP) or (ii) any Permitted Joint Venture
shall be included only to the extent of the amount of dividends or distributions
paid to the Person in question or the Group Member, (b) the Net Income of any
Group Member of the Person in question that is subject to any restriction or
limitation (including without limitation as a result of the failure of such
dividend or distribution to be irrevocably authorized by other members of a
Restricted Joint Venture where such other members' authorization is necessary
for such dividend or distribution or such other members otherwise have the
ability to restrict or limit such dividend or distribution) on the payment of
dividends or the making of other distributions (other than pursuant to the
Notes, this Agreement, any other Loan Document or the Note Purchase Agreement or
the notes issued in connection therewith) shall be excluded to the extent of
such restriction or limitation, (c)(i) the Net Income of any Person acquired in
a pooling of interests transaction for any period prior to the date of such
acquisition and (ii) any net gain or loss resulting from an Asset Sale by the
Person in question or any of its Group Members other than in the ordinary course
of business shall be excluded, (d) extraordinary gains and losses shall be
excluded, (e) income or loss attributable to discontinued operations (including
without limitation operations disposed of during such period whether or not such
operations were classified as discontinued) shall be excluded, and (f) to the
extent not otherwise excluded in accordance with GAAP, the Net Income of any
Group Member in an amount that corresponds to the percentage ownership interest
in the income of such Group Member not owned on the last day of such period,
directly or indirectly, by such Person shall be excluded.
"Consolidated Net Worth" shall mean, with respect to any Person at any
date, the Consolidated stockholder's equity of such Person less the amount of
such stockholder's equity
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attributable to Disqualified Capital Stock of such Person and its Subsidiaries,
as determined in accordance with GAAP.
"Controlled Group" shall mean a Company and each "person" (as therein
defined) required to be aggregated with a Company and treated as a single
employer under Code Section 414(b), (c), (m) or (o).
"Debt" shall mean, collectively, (a) all Indebtedness incurred by
Borrower to Lender pursuant to this Agreement and includes the principal of and
interest on all Notes; (b) each extension, renewal or refinancing thereof with
Lender in whole or in part; (c) the commitment and other fees, and any
prepayment premium payable hereunder; (d) every other liability, now or
hereafter owing to KeyBank or Lender by Borrower, and includes, without
limitation, every liability, whether owing by only Borrower or by Borrower with
one or more others in a several, joint or joint and several capacity, whether
owing absolutely or contingently, whether created by note, overdraft, guaranty
of payment or other contract or by quasi-contract, tort, statute or other
operation of law, whether incurred directly to KeyBank or Lender or acquired by
KeyBank or Lender by purchase, pledge or otherwise and whether participated to
or from KeyBank or Lender in whole or in part; and (e) all Related Expenses.
"Default Rate" shall mean a rate per annum which shall be two percent
(2%) in excess of the Derived LIBOR Rate or Derived Prime Rate, as the case may
be, from time to time in effect. "Deposit Account" shall mean (a) any deposit
account, and (b) any demand, time, savings, passbook, or a similar account
maintained with a bank, savings and loan association, credit union, or similar
organization.
"Derived LIBOR Rate" shall mean a rate per annum which shall be the sum
of the Applicable Margin plus the LIBOR Rate.
"Derived Prime Rate" shall mean a rate per annum which shall be the sum
of the Applicable Margin plus the Prime Rate.
"Disqualified Capital Stock" shall mean any Capital Stock of a Person
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to the maturity date of the
Notes, for cash or securities constituting Indebtedness. Without limitation of
the foregoing, Disqualified Capital Stock shall be deemed to include any
Preferred Stock of Borrower with respect to which, under the terms of such
Preferred Stock, by agreement or otherwise, Borrower is obligated to pay current
dividends or distributions in cash during the period prior to the maturity date
of the Notes; provided, however, that Preferred Stock of Borrower that is issued
with the benefit of provisions requiring a change of control offer to be made
for such Preferred Stock in the event of a change of control of Borrower, shall
not be deemed to be Disqualified Capital Stock solely by virtue of such
provisions.
"Eligible Account Receivable" shall mean an Account of a Company to the
extent arising
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out of completed sales or services performed by such Company in accordance with
the terms and conditions of all purchase orders, contracts and other documents
relating thereto, which, at all times until it is collected in full,
continuously meets the following requirements: (a) is not subject to any claim
for credit, allowance, or adjustment by the Account Debtor or any set off or
counter claim; provided, however, that such Account shall only be excluded to
the extent of such claim for credit, allowance or adjustment or such setoff or
counterclaim; (b) arose in the ordinary course of such Company's business from
the performance (fully completed) of services or bona fide sale of goods which
have been shipped to the Account Debtor, and not more than ninety (90) days have
elapsed since the performance (fully completed) of services or the sale of goods
for or to the Account Debtor; (c) is not due from any Account Debtor with
respect to which such Company has received any notice or has any knowledge of
insolvency, bankruptcy or financial impairment; (d) is not subject to an
assignment, pledge, claim, mortgage, lien, or security interest of any type
except that granted to or in favor of Lender; (e) does not relate to any goods
rejected or returned, or acceptance of which has been revoked or refused; (f) is
not the subject of any instrument or chattel paper offered in payment thereof;
(g) has not been determined by Lender, in its reasonable discretion, to be
unsatisfactory in any respect; (h) is not a Government Account Receivable,
unless Lender's security interest in such Government Account Receivable is filed
in accordance with the Federal Assignment of Claims Act; (i) is not an account
receivable due from any affiliate, shareholder or employee of such Company; (j)
is not a Foreign Account Receivable; (k) is not evidenced by a promissory note
or any other negotiable instrument; (l) is not an account receivable owed to
such Company by an Account Debtor which has failed to pay more than twenty-five
percent (25%) of its currently outstanding accounts receivable within ninety
(90) days of service or sale of goods; and (m) Lender has a valid and
enforceable first security interest in the Account subject to Permitted Liens.
"Environmental Laws" shall mean, to the extent legally binding, all
provisions of law, statutes, ordinances, rules, regulations, permits, licenses,
judgments, writs, injunctions, decrees, orders, awards and standards promulgated
by the government of the United States of America or by any state or
municipality thereof or by any court, agency, instrumentality, regulatory
authority or commission of any of the foregoing concerning health, safety and
protection of, or regulation of the discharge of substances into, the
environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated pursuant thereto.
"ERISA Event" shall mean: (a) the existence of any condition or event
with respect to an ERISA Plan which presents a risk of the imposition of an
excise tax or any other liability on a Company or of the imposition of a Lien on
the assets of a Company; (b) a Controlled Group member has engaged in a
non-exempt "prohibited transaction" (as defined under ERISA Section 406 or Code
Section 4975) or a breach of a fiduciary duty under ERISA which could result in
liability to a Company; (c) a Controlled Group member has applied for a waiver
from the minimum funding requirements of Code Section 412 or ERISA Section 302
or a Controlled Group member is required to provide security under Code Section
401(a)(29) or ERISA Section 307; (d) a Reportable Event has occurred with
respect to any Pension Plan as to which notice is required to be provided to the
PBGC; (e) a Controlled Group member has withdrawn from a Multiemployer Plan in a
"complete withdrawal" or a "partial withdrawal" (as such terms are
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defined in ERISA Sections 4203 and 4205, respectively); (f) a Multiemployer Plan
is in reorganization under ERISA Section 4241; (g) an ERISA Plan (and any
related trust) which is intended to be qualified under Code Sections 401 and 501
fails to be so qualified or any "cash or deferred arrangement" under any such
ERISA Plan fails to meet the requirements of Code Section 401(k); (h) the PBGC
takes any steps to terminate a Pension Plan or appoint a trustee to administer a
Pension Plan, or a Controlled Group member takes steps to terminate a Pension
Plan; (i) a Controlled Group member or an ERISA Plan fails to satisfy any
requirements of law applicable to an ERISA Plan; (j) a claim, action, suit,
audit or investigation is pending or threatened with respect to an ERISA Plan,
other than a routine claim for benefits; or (k) a Controlled Group member incurs
or is expected to incur any material liability for post-retirement benefits
under any Welfare Plan, other than as required by ERISA Section 601, et. seq. or
Code Section 4980B.
"ERISA Plan" shall mean an "employee benefit plan" (within the meaning
of ERISA Section 3(3)) that a Controlled Group member at any time sponsors,
maintains, contributes to, has liability with respect to or has an obligation to
contribute to such plan.
"Eurocurrency Reserve Percentage" shall mean, for any Interest Period
in respect of any LIBOR Loan, as of any date of determination, the aggregate of
the then stated maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves), expressed as a decimal, applicable to such
Interest Period (if more than one such percentage is applicable, the daily
average of such percentages for those days in such Interest Period during which
any such percentage shall be so applicable) by the Board of Governors of the
Federal Reserve System, any successor thereto, or any other banking authority,
domestic or foreign, to which Lender may be subject in respect to eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Federal Reserve Board) or in respect of any other category of liabilities
including deposits by reference to which the interest rate on LIBOR Loans is
determined or any category of extension of credit or other assets that include
the LIBOR Loans. For purposes hereof, such reserve requirements shall include,
without limitation, those imposed under Regulation D of the Federal Reserve
Board and the LIBOR Loans shall be deemed to constitute Eurocurrency Liabilities
subject to such reserve requirements without benefit of credits for proration,
exceptions or offsets which may be available from time to time to any Lender
under said Regulation D.
"Event of Default" shall mean an event or condition which constitutes
an event of default as defined in Article VIII hereof.
"Financial Officer" shall mean any of the following officers: chief
executive officer, president, chief financial officer or treasurer.
"Foreign Account Receivable" shall mean any Account which arises out of
contracts with or orders from an Account Debtor which is not a resident of the
United States.
"Funded Indebtedness" shall mean all Indebtedness that is funded,
including, but not limited to, long-term and Subordinated Indebtedness, if any,
and the current portions of each of the foregoing.
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"GAAP" shall mean generally accepted accounting principles as then in
effect, which shall include the official interpretations thereof by the
Financial Accounting Standards Board, applied on a basis consistent with the
past accounting practices and procedures of Borrower.
"General Intangibles" shall mean the following general intangibles
which relate in any manner to the Accounts or any Proceeds, whether now or
hereafter acquired by a Company: choses in action, causes of action, all
customer lists, corporate or other business records, and all rights to
indemnification, in each case to the extent relating to the Accounts, and all
proceeds of any of the foregoing, irrespective of the form or kind thereof.
"Government Account Receivable" shall mean any Account which arises out
of contracts with or orders from the United States or any of its departments,
agencies or instrumentalities.
"Group Members" shall mean, collectively, each Subsidiary of a Company,
each Restricted Joint Venture and each Subsidiary of a Restricted Joint Venture.
"Guarantor" shall mean a Person which pledges its credit or property in
any manner for the payment or other performance of the indebtedness, contract or
other obligation of another and includes (without limitation) any guarantor
(whether of payment or of collection), surety, co-maker, endorser or Person
which agrees conditionally or otherwise to make any purchase, loan or investment
in order thereby to enable another to prevent or correct a default of any kind.
"Guarantor of Payment" shall mean any one of the entities set forth on
Schedule 1 attached hereto and made a part hereof which are each executing and
delivering a Guaranty of Payment, or any other Person which shall deliver a
Guaranty of Payment to Lender subsequent to the Closing Date.
"Guaranty of Payment" shall mean each of the guaranties of payment of
the Debt executed and delivered on or after the Closing Date in connection
herewith by the Guarantors of Payment, as the same may be from time to time
amended, restated or otherwise modified.
"Guarantor Security Agreement" shall mean a Security Agreement executed
and delivered by a Guarantor of Payment to Lender in connection with this
Agreement, as the same may be from time to time amended, supplemented or
otherwise modified.
"Indebtedness" shall mean, for any Company (excluding in all cases
accounts payable or trade payables in the ordinary course of business, any
obligations to other members of a "consortium" or similar group of aircraft
service providers arising from the fact that such Company holds cash on behalf
of such other consortium members in the ordinary course of business, and other
accrued liabilities arising in the ordinary course of business), without
duplication, (a) all obligations to repay borrowed money, direct or indirect,
incurred, assumed, or guaranteed, (b) all obligations for the deferred purchase
price of capital assets, (c) all obligations under conditional sales or other
title retention agreements, (d) all reimbursement obligations (contingent or
otherwise) under any letter of credit (provided that in the case of any such
letters of credit, the items for which such letters of credit provide credit
support are those of other
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Persons which would be included within this definition for such other Persons),
banker's acceptance, currency swap agreement, interest rate swap, cap, collar or
floor agreement or other interest rate management device (if and to the extent
such hedging agreement obligations would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP), (e) all lease
obligations which have been or should be capitalized on the books of such
Company in accordance with GAAP, and (f) any other transaction (including
forward sale or purchase agreements) having the commercial effect of a borrowing
of money entered into by such Company to finance its operations or capital
requirements.
"Interest Adjustment Date" shall mean the last day of each Interest
Period.
"Interest Period" shall mean, with respect to any LIBOR Loan, the
period commencing on the date such LIBOR Loan is made and ending on the last day
of such period, as selected by Borrower pursuant to the provisions hereof, and,
thereafter, each subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of such period, as selected
by Borrower pursuant to the provisions hereof. The duration of each Interest
Period for any LIBOR Loan shall be one (1) month, two (2) months, three (3)
months or six (6) months, in each case as Borrower may select upon notice, as
set forth in Section 2.2 hereof, provided that (a) if Borrower fails to so
select the duration of any Interest Period, Borrower shall be deemed to have
converted such LIBOR Loan to a Prime Rate Loan at the end of the then current
Interest Period; and (b) Borrower may not select any Interest Period for a LIBOR
Loan which ends after the end of the Commitment Period.
"Inventory" shall mean (a) all inventory as defined in Chapter 1309 of
the Ohio Revised Code; (b) all goods that are raw materials; (c) all goods that
are work in process; (d) all goods that are materials used or consumed in the
ordinary course of a Company's business; (e) all goods that are, in the ordinary
course of a Company's business, held for sale or lease or furnished or to be
furnished under contracts of service; and (f) all substitutes and replacements
for, and parts, accessories, additions, attachments, or accessions to (a)
through (e) above.
"Investments" shall mean, directly or indirectly, any advance, account
receivable (other than an account receivable arising in the ordinary course of
business or acquired as part of the assets acquired by a Company in connection
with an acquisition of assets which is not prohibited by the terms of this
Agreement), loan or capital contribution to (by means of transfers of property
to others, payments for property or services for the account or use of others or
otherwise), the purchase of any stock, bonds, notes, debentures, partnership or
joint venture interests or other securities of, the acquisition, by purchase or
otherwise, of all or substantially all of the business or assets or stock or
other evidence of beneficial ownership of, any Person or the making of any
investment in any Person. Investments shall exclude (i) extensions of trade
credit on commercially reasonable terms in accordance with normal trade
practices and (ii) the repurchase of securities of any Person by such Person.
"KeyBank" shall mean KeyBank National Association, its affiliates and
their respective successors and assigns.
12
"Letter of Credit" shall mean any standby letter of credit which shall
be issued by Lender or KeyBank for the benefit of Borrower or a Guarantor of
Payment, including amendments thereto, if any, and shall have an expiration date
no later than the earlier of (a) one (1) year after its date of issuance, or (b)
thirty (30) days prior to the last day of the Commitment Period.
"Leverage Ratio" shall mean, for the time period in question and on a
Consolidated basis and in accordance with GAAP, the ratio for the Companies of
all Funded Indebtedness to Consolidated EBITDA as of the end of such period.
"LIBOR Loan" shall mean a Loan described in Section 2.1 hereof on which
Borrower shall pay interest at a rate based on the LIBOR Rate.
"LIBOR Rate" shall mean, for any Interest Period with respect to a
LIBOR Loan, the quotient (rounded upwards, if necessary, to the nearest one
sixteenth of one percent (1/16th of 1%)) of: (a) the per annum rate of interest,
determined by Lender in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) as of approximately
11:00 A.M. (London time) two (2) Business Days prior to the beginning of such
Interest Period pertaining to such LIBOR Loan, as provided by Telerate Service,
Bloomberg's or Reuters (or any other similar company or service that provides
rate quotations comparable to those currently provided by such companies as the
rate in the London interbank market) for dollar deposits in immediately
available funds with a maturity comparable to such Interest Period, divided by
(b) a number equal to 1.00 minus the Eurocurrency Reserve Percentage. In the
event that such rate quotation is not available for any reason, then the rate
(for purposes of clause (a) hereof) shall be the rate, determined by Lender as
of approximately 11:00 A.M. (London time) two (2) Business Days prior to the
beginning of such Interest Period pertaining to such LIBOR Loan, to be the
average (rounded upwards, if necessary, to the nearest one sixteenth of one
percent (1/16th of 1%)) of the per annum rates at which dollar deposits in
immediately available funds in an amount comparable to such LIBOR Loan and with
a maturity comparable to such Interest Period are offered to the prime banks by
leading banks in the London interbank market. The LIBOR Rate shall be adjusted
automatically on and as of the effective date of any change in the Eurocurrency
Reserve Percentage.
"Lien" shall mean any mortgage, security interest, lien, charge,
encumbrance on, pledge or deposit of, or conditional sale or other title
retention agreement with respect to any property (real or personal) or asset.
"Loan" or "Loans" shall mean the credit granted to Borrower in
accordance with Section 2.1A hereof.
"Loan Documents" shall mean this Agreement, each of the Notes, each of
the Guaranties of Payment, each of the Guarantor Security Agreements, all
documentation relating to each Letter of Credit, each U.C.C. financing statement
executed in connection herewith, and any other documents delivered pursuant
thereto, as any of the foregoing may from time to time be amended, restated or
otherwise modified or replaced.
"Maintenance Capital Expenditures" shall mean the lesser of (a) fifty
percent (50%) of Capital Expenditures for the period in question, or (b) Three
Million Dollars ($3,000,000).
13
"Material Adverse Effect" shall mean (a) a material adverse effect on
the business, assets, condition (financial or otherwise), results of operations
or properties of the Companies, taken as a whole, or (b) a material adverse
effect on the legality, validity, binding effect or enforceability of the Loan
Documents or the rights of Lender thereunder.
"Multiemployer Plan" shall mean a Pension Plan that is subject to the
requirements of Subtitle E of Title IV of ERISA.
"Net Income" shall mean, with respect to any Person for any period, the
net income (loss) of such Person determined in accordance with GAAP.
"Note" shall mean the Revolving Credit Note or any other note delivered
pursuant to this Agreement.
"Note Purchase Agreement" shall mean that certain Note Purchase
Agreement, dated as of April 2, 1998, among Borrower, Ranger Aerospace and CIBC
Xxxxxxxxxxx Corp., as amended, modified and supplemented from time to time,
including any agreements refinancing, replacing, refunding or otherwise
restructuring all or a portion of the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same lenders or purchasers
or any others. The definition of Note Purchase Agreement shall include the notes
issued thereunder and all replacements thereof and guarantees rendered in
connection therewith.
"Notice of Loan" shall mean a Notice of Loan in the form of the
attached Exhibit B.
"Obligor" shall mean a Person whose credit or any of whose property is
pledged to the payment of the Debt and includes, without limitation, Borrower
and any Guarantor of Payment.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or its
successor.
"Pension Plan" shall mean an ERISA Plan that is a "pension plan"
(within the meaning of ERISA Section 3(2)).
"Permitted Joint Venture" shall mean any joint venture arrangement
(which may be structured as a corporation, partnership, trust, limited liability
company or any other Person) constituting a "Permitted Joint Venture" as defined
in the Note Purchase Agreement.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, corporation, limited
liability company, institution, trust, estate, government or other agency or
political subdivision thereof or any other entity.
"PIK Interest" shall mean, with respect to any Indebtedness, any
interest thereon paid or payable in the form of additional Indebtedness,
including, without limitation, the obligations represented by additional notes
issued in payment of interest due on such notes.
14
"Preferred Stock" shall mean any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"Prime Rate" shall mean the interest rate established from time to time
by Lender as Lender's prime rate, whether or not such rate is publicly
announced; the Prime Rate may not be the lowest interest rate charged by Lender
for commercial or other extensions of credit. Each change in the Prime Rate
shall be effective immediately from and after such change.
"Prime Rate Loan" shall mean a Loan described in Section 2.1 hereof on
which Borrower shall pay interest at a rate based on the Prime Rate.
"Proceeds" shall mean (a) any proceeds, and (b) whatever is received
upon the sale, exchange, collection, or other disposition of Collateral or
proceeds, whether cash or non-cash. Cash proceeds includes, without limitation,
monies, checks, and Deposit Accounts. Proceeds includes, without limitation, any
Account arising when the right to payment is earned under a contract right, any
insurance payable by reason of loss or damage to the Collateral, and any return
or unearned premium upon any cancellation of insurance. Except as expressly
authorized in this Agreement, Lender's right to Proceeds specifically set forth
herein or indicated in any financing statement shall never constitute an express
or implied authorization on the part of Lender to Borrower's sale, exchange,
collection, or other disposition of any or all of the Collateral.
"Proviso" shall mean that for Borrower's fiscal quarters ending prior
to the fiscal quarter ending on or about March 31, 1999, Consolidated EBITDA, as
referred to in Sections 5.7(a) and (b) hereof, shall be calculated as follows:
(a) for the fiscal quarter ending on or about June 30, 1998, Consolidated EBITDA
shall be annualized by multiplying the Consolidated EBITDA for that fiscal
quarter by four (4), (b) for the fiscal quarter ending on or about September 30,
1998, Consolidated EBITDA shall be annualized by multiplying the Consolidated
EBITDA for that fiscal quarter and the previous fiscal quarter by two (2), and
(c) for the fiscal quarter ending on or about December 31, 1998, Consolidated
EBITDA shall be annualized by multiplying the Consolidated EBITDA for that
fiscal quarter and the two (2) previous fiscal quarters by one and one-third
(1.333).
"Ranger Aerospace" shall mean Ranger Aerospace Corporation, a Delaware
corporation, and its successors and assigns.
"Redeemable Dividend" shall mean, for any dividend or distribution with
regard to Disqualified Capital Stock, the quotient of the dividend or
distribution divided by the difference between one (1) and the maximum statutory
federal income tax rate (expressed as a decimal number between one (1) and zero
(0)) then applicable to the issuer of such Disqualified Capital Stock.
"Related Expenses" shall mean any and all reasonable costs,
liabilities, and reasonable expenses (including, without limitation, losses,
damages, penalties, claims, actions, reasonable attorneys' fees, legal expenses,
judgments, suits, and disbursements) incurred by, imposed upon, or asserted
against, Lender in any attempt by Lender: (a) to obtain, preserve, perfect, or
enforce
15
any security interest evidenced by this Agreement or any Related Writing; (b) to
obtain payment, performance, and observance of any and all of the Debt; (c) to
maintain, insure, audit, collect, preserve, repossess, and dispose of any of the
Collateral securing the Debt or any thereof, including, without limitation,
costs and expenses for appraisals, assessments, and audits of Borrower or any
such collateral; or (d) incidental or related to (a) through (c) above,
including, without limitation, interest thereupon from the date incurred,
imposed, or asserted until paid at the Default Rate.
"Related Writing" shall mean the Loan Documents and any other
assignment, mortgage, security agreement, guaranty agreement, subordination
agreement, pledge agreement, financial statement, audit report or other writing
furnished by Borrower, any Subsidiary or any Obligor, or any of their respective
officers, to Lender pursuant to or otherwise in connection with this Agreement.
"Reportable Event" shall mean a reportable event as that term is
defined in Title IV of ERISA, except actions of general applicability by the
Secretary of Labor under Section 110 of such Act.
"Restricted Joint Venture" shall mean a Permitted Joint Venture that
has been designated by the Board of Directors of Borrower as a Restricted Joint
Venture based on its good faith determination, evidenced by a board resolution,
that Borrower has, directly or indirectly, the requisite control over such
Permitted Joint Venture to prevent it from incurring Indebtedness, or taking any
other action at any time, in contravention of any of the provisions of this
Agreement that are applicable to Restricted Joint Ventures; provided that,
immediately after giving effect to such designation, (i) the Indebtedness and
liens of such Permitted Joint Venture outstanding immediately after such
designation would, if incurred at such time, have been permitted to be incurred
for all purposes of this Agreement, and (ii) no Unmatured Event of Default or
Event of Default shall have occurred and be continuing. Borrower shall deliver
an officers' certificate to Lender upon designating any Permitted Joint Venture
as a Restricted Joint Venture.
"Revolving Credit Commitment" shall mean the obligation hereunder of
Lender, during the Commitment Period, to make Revolving Loans and to issue
Letters of Credit, up to an aggregate principal amount outstanding at any time
equal to the lesser of (a)Ten Million Dollars ($10,000,000), or (b) the
Borrowing Base.
"Revolving Credit Note" shall mean the Revolving Credit Note executed
and delivered pursuant to Section 2.1A hereof.
"Revolving Loan" shall mean a Loan granted to Borrower by Lender in
accordance with Section 2.1A hereof.
"Share Purchase Agreement" shall mean that certain Share Purchase
Agreement, dated as of March 14, 1998, between VIAD Corp., VIAD Service
Companies Limited and Ranger Aerospace, as amended to the date hereof and as
further amended, modified and supplemented from time to time.
16
"Subordinated", as applied to Indebtedness, shall mean that the
Indebtedness has been subordinated (by written terms or written agreement being,
in either case, in form and substance satisfactory to Lender) in favor of the
prior payment in full of the Debt.
"Subsidiary" of Borrower or any of its Subsidiaries shall mean (a) a
corporation more than fifty percent (50%) of the Voting Power or capital stock
of which is owned, directly or indirectly, by Borrower or by one or more other
subsidiaries of Borrower or by Borrower and one or more subsidiaries of
Borrower, (b) a partnership or limited liability company of which Borrower, one
or more other subsidiaries of Borrower or Borrower and one or more subsidiaries
of Borrower, directly or indirectly, is a general partner or managing member, as
the case may be, or otherwise has the power to direct the policies, management
and affairs thereof, or (c) any other Person (other than a corporation) in which
Borrower, one or more other subsidiaries of Borrower or such Person, directly or
indirectly, has at least a majority ownership interest or the power to direct
the policies, management and affairs thereof.
"Temporary Cash Investments" shall mean (i) Investments in marketable
direct obligations issued or guaranteed by the United States of America, or of
any governmental agency or political subdivision thereof, maturing within three
hundred sixty five (365) days of the date of purchase, (ii) Investments in
certificates of deposit issued by a bank organized under the laws of the United
States of America or any state thereof or the District of Columbia, in each case
having capital, surplus and undivided profits at the time of investment totaling
more than Five Hundred Million Dollars ($500,000,000) and rated at the time of
investment at least A by S&P and A-2 by Xxxxx'x maturing within three hundred
sixty-five (365) days of purchase, or (iii) Investments not exceeding three
hundred sixty-five (365) days in duration in money market funds that invest
substantially all of such funds' assets in the Investments described in the
preceding clauses (i) and (ii).
"Termination Fee" shall mean an amount equal to (a) the Commitment,
times (b) one-half of one percent (1/2%).
"Unmatured Event of Default" shall mean an event or condition which
constitutes, or which with the lapse of any applicable grace period or the
giving of notice or both would constitute, an Event of Default, and which has
not been waived by Lender in writing.
"Voting Power" shall mean, with respect to any Person, the exclusive
ability to control, through the ownership of shares of capital stock,
partnership interests, membership interests or otherwise, the election of
members of the board of directors or other similar governing body of such
Person, and the holding of a designated percentage of Voting Power of a Person
means the ownership of shares of capital stock, partnership interests,
membership interests or other interests of such Person sufficient to control
exclusively the election of that percentage of the members of the board of
directors or similar governing body of such Person.
"Welfare Plan" shall mean an ERISA Plan that is a "welfare plan" within
the meaning of ERISA Section 3 (l).
17
"Wholly-Owned Subsidiary" shall mean, with respect to any Person, any
corporation, limited liability company or other entity all (other than, in
respect of foreign Subsidiaries, directors' qualifying shares or immaterial
amounts of shares held by foreign nationals to the extent mandated by or
advantageous under applicable law) of the securities or other ownership
interest, of which having ordinary Voting Power to elect a majority of the board
of directors or other persons performing similar functions are at the time
directly or indirectly owned by such Person.
"Year 2000 Compliant" shall mean that all Computer Systems will operate
accurately, without interruption and with no negative change in performance due
to the change of the millennium.
Any accounting term not specifically defined in this Article I shall
have the meaning ascribed thereto by GAAP. Unless otherwise defined in this
Article I, terms which are defined in Chapter 1309 of the Ohio Revised Code in
effect on the Closing Date are used herein as so defined.
The foregoing definitions shall be applicable to the singular and
plurals of the foregoing defined terms.
ARTICLE II. AMOUNT AND TERMS OF CREDIT
SECTION 2.1. AMOUNT AND NATURE OF CREDIT. Subject to the terms and
conditions of this Agreement, Lender shall make Loans to Borrower, and Lender
shall, or shall cause KeyBank to, issue Letters of Credit at the request of
Borrower, in such aggregate amount as Borrower shall request pursuant to the
Revolving Credit Commitment; provided, however, that in no event shall the
aggregate principal amount of all Loans and Letters of Credit outstanding under
this Agreement during the Commitment Period be in excess of the Commitment.
The Loans may be made as Revolving Loans, and Letters of Credit may be
issued, as follows:
A. Revolving Loans. Subject to the terms and conditions of this
Agreement, during the Commitment Period, Lender shall make a Revolving Loan or
Revolving Loans to Borrower in such amount or amounts as Borrower may from time
to time request, but not exceeding in aggregate principal amount at any one time
outstanding hereunder the Revolving Credit Commitment, when such Revolving Loans
are combined with the aggregate undrawn face amount of all issued and
outstanding Letters of Credit. Borrower shall have the option, subject to the
terms and conditions set forth herein, to borrow Revolving Loans, maturing on
the last day of the Commitment Period, up to the amount of the Revolving Credit
Commitment by means of any combination of (a) Prime Rate Loans, bearing interest
at a rate per annum which shall be the Derived Prime Rate from time to time in
effect, or (b) LIBOR Loans, bearing interest at a rate per annum which shall be
the Derived LIBOR Rate, fixed in advance of each Interest Period but subject to
changes in the Applicable Margin as herein provided for each such Interest
Period.
18
Borrower shall pay interest, in arrears, on the unpaid principal amount
of Prime Rate Loans outstanding from time to time from the date thereof until
paid, on the first day of each month, and at the maturity thereof, commencing
May 1, 1998. Borrower shall pay interest at a fixed rate for each Interest
Period but subject to changes in the Applicable Margin on the unpaid principal
amount of each LIBOR Loan outstanding from time to time from the date thereof
until paid, payable on each Interest Adjustment Date with respect to an Interest
Period (provided that if an Interest Period exceeds three (3) months, the
interest must be paid every three (3) months, commencing three (3) months from
the beginning of such Interest Period).
At the request of Borrower, provided no Event of Default exists
hereunder, Lender shall convert Prime Rate Loans to LIBOR Loans at any time,
subject to the notice and other provisions of Section 2.2 hereof, and shall
convert LIBOR Loans to Prime Rate Loans on any Business Day, provided that any
such prepayment of a LIBOR Loan pursuant to this sentence shall be subject to
the prepayment fees set forth in Section 2.4 hereof.
The obligation of Borrower to repay the Prime Rate Loans and the LIBOR
Loans made by Lender and to pay interest thereon shall be evidenced by a
Revolving Credit Note of Borrower substantially in the form of Exhibit A hereto,
dated the Closing Date and payable to the order of Lender in the principal
amount of the Revolving Credit Commitment, or, if less, the aggregate unpaid
principal amount of Revolving Loans made hereunder. Subject to the provisions of
this Agreement, Borrower shall be entitled under this Section 2.1A to borrow
funds, repay the same in whole or in part and re-borrow hereunder at any time
and from time to time during the Commitment Period.
B. Letters of Credit. Subject to the terms and conditions of this
Agreement, during the Commitment Period, Lender shall issue such Letters of
Credit for the account of Borrower or any Guarantor of Payment, as Borrower may
from time to time request. Borrower shall not request any Letter of Credit (and
Lender shall not be obligated to issue any Letter of Credit) if, after giving
effect thereto, (a) the aggregate undrawn face amount of all issued and
outstanding Letters of Credit would exceed Two Million Dollars ($2,000,000) or
(b) the sum of (i) the aggregate outstanding principal amount of all Revolving
Loans, plus (ii) the aggregate undrawn face amount of all issued and outstanding
Letters of Credit would exceed the Revolving Credit Commitment.
Each request for a Letter of Credit shall be delivered to Lender not
later than 11:00 A.M. (Cleveland, Ohio time) three (3) Business Days prior to
the day upon which the Letter of Credit is to be issued. Each such request shall
be in a form acceptable to Lender and specify the face amount thereof, the
account party, the beneficiary, the intended date of issuance, the expiry date
thereof, and the nature of the transaction to be supported thereby. Concurrently
with each such request, Borrower, and any Guarantor of Payment for whose benefit
the Letter of Credit is to be issued, shall execute and deliver to Lender an
appropriate application and agreement, being in the standard form of Lender for
such letters of credit, as amended to conform to the provisions of this
Agreement if required by Lender. The provisions of this Agreement shall control
any conflict or inconsistency with such application.
19
In respect of each Letter of Credit and the drafts thereunder, if any,
whether issued for the account of Borrower or a Guarantor of Payment, Borrower
agrees (a) to pay to Lender a non-refundable commission based upon the face
amount of the Letter of Credit, which shall be paid quarterly in arrears, at the
rate of the Applicable Margin for LIBOR Loans (as adjusted from time to time)
times the face amount of the Letter of Credit; and (b) to pay to Lender, such
other issuance, amendment, negotiation, draw, acceptance, telex, courier,
postage and similar transactional fees as are generally charged by Lender to its
other customers under its fee schedule as in effect from time to time.
Whenever a Letter of Credit is drawn, unless the amount drawn is
immediately reimbursed by Borrower, the amount outstanding thereunder shall be
deemed to be a Revolving Loan to Borrower subject to the provisions of Section
2.1A and shall be evidenced by the Revolving Credit Note but without regard to
Section 2.2 hereof. Each such Revolving Loan shall be deemed to be a Prime Rate
Loan unless otherwise requested by and available to Borrower hereunder. Lender
is hereby authorized to record on its records relating to the Revolving Credit
Note the amounts paid and not reimbursed on the Letters of Credit.
SECTION 2.2. CONDITIONS TO LOANS AND LETTERS OF CREDIT. The obligation
of Lender to make, convert or continue any Loan and to issue any Letter of
Credit hereunder is conditioned, in the case of each borrowing, conversion,
continuation or issuance hereunder, upon:
(a) with respect to the initial borrowings, all
conditions precedent as listed in Article IV hereof shall have been
satisfied;
(b) with respect to Loans, receipt by Lender of a Notice
of Loan, such notice to be received by 1:00 P.M. (Cleveland, Ohio time)
on the proposed date of borrowing with respect to a Prime Rate Loan
and, with respect to a LIBOR Loan, by 1:00 P.M. (Cleveland, Ohio time)
three (3) Business Days prior to the proposed date of borrowing; or,
with respect to Letters of Credit, satisfaction of the notice
provisions set forth in Section 2.1B hereof.
(c) Borrower's request for a Prime Rate Loan shall be in
an amount of not less than One Hundred Thousand Dollars ($100,000), and
Borrower's request for a LIBOR Loan shall be in an amount of not less
than Five Hundred Thousand ($500,000), increased by increments of One
Hundred Thousand Dollars ($100,000);
(d) the fact that no Unmatured Event of Default or Event
of Default shall then exist or immediately after the making, conversion
or continuation of the Loan or issuance of the Letter of Credit would
exist; and
(e) the fact that each of the representations and
warranties contained in Article VII hereof shall be true and correct
with the same force and effect as if made on and as of the date of the
making, conversion or continuation of such Loan, or the issuance of the
Letter of Credit, except to the extent that any thereof expressly
relate to an earlier date.
20
At no time shall Borrower request that LIBOR Loans be outstanding for
more than six (6) different Interest Periods at any one (1) time, and, if Prime
Rate Loans are outstanding, then LIBOR Loans shall be limited to five (5)
different Interest Periods at any one (1) time.
Each request by Borrower for the making, conversion or continuation of
a Loan, or for the issuance of a Letter of Credit hereunder shall be deemed to
be a representation and warranty by Borrower as of the date of such request as
to the facts specified in (d) and (e) above.
Subject to the provisions of Sections 3.3 and 3.5 hereof, each request
for a LIBOR Loan shall be irrevocable and binding on Borrower and Borrower shall
indemnify Lender against any loss or expense incurred by Lender as a result of
any failure by Borrower to consummate such transaction including, without
limitation, any loss (excluding loss of anticipated profits) or expense incurred
by reason of liquidation or re-employment of deposits or other funds acquired by
Lender to fund such LIBOR Loan. A certificate as to the amount of such loss or
expense submitted by Lender to Borrower shall be conclusive and binding for all
purposes, absent manifest error.
SECTION 2.3. PAYMENT ON NOTES, ETC. All payments of principal, interest
and commitment and other fees shall be made to Lender in immediately available
funds. Lender shall record (a) any principal, interest or other payment, and (b)
the principal amount of the Prime Rate Loans and the LIBOR Loans and all
prepayments thereof and the applicable dates with respect thereto, by such
method as Lender may generally employ; provided, however, that failure to make
any such entry shall in no way detract from Borrower's obligations under each
such Note. The aggregate unpaid amount of Prime Rate Loans and LIBOR Loans set
forth on the records of Lender shall be rebuttably presumptive evidence of the
principal and interest owing and unpaid on each Note. Whenever any payment to be
made hereunder, including, without limitation, any payment to be made on any
Note, shall be stated to be due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall in each case be included in the computation of the interest payable
on each Note; provided, however, that with respect to any LIBOR Loan, if the
next succeeding Business Day falls in the succeeding calendar month, such
payment shall be made on the preceding Business Day and the relevant Interest
Period shall be adjusted accordingly.
SECTION 2.4. PREPAYMENT. Borrower shall have the right at any time or
from time to time to prepay all or any part of the principal amount of the Notes
then outstanding as designated by Borrower. Borrower shall give Lender notice of
prepayment of any Prime Rate Loan by not later than 1:00 P.M. (Cleveland, Ohio
time) on the Business Day such prepayment is to be made and written notice of
the prepayment of any LIBOR Loan prior to the end of the applicable Interest
Period not later than 1:00 P.M. (Cleveland, Ohio time) three (3) Business Days
before the Business Day on which such prepayment is to be made. Prepayments of
Prime Rate Loans shall be without any premium or penalty. Prepayment of LIBOR
Loans at the end of the applicable Interest Period shall be without any premium
or penalty.
In any case of prepayment of any LIBOR Loan prior to the end of the
applicable Interest Period related thereto, Borrower agrees that if the LIBOR
Rate as determined as of 11:00 A.M. (London time), three (3) Business Days prior
to the date of prepayment of such LIBOR Loan (hereinafter, "Prepayment LIBOR")
shall be lower than the last LIBOR Rate previously
21
determined for such LIBOR Loan with respect to which prepayment is intended to
be made (hereinafter, "Last LIBOR"), then Borrower shall, upon written notice by
Lender, promptly pay to Lender in immediately available funds, a prepayment fee
equal to the product of (a) a rate per annum (the "Prepayment Rate") which shall
be equal to the difference between the Last LIBOR and the Prepayment LIBOR,
times (b) all or such part of the principal amounts of the Notes as relate to
the LIBOR Loan to be prepaid, times (c) the quotient of (i) the number of days
in the period commencing with the date on which such prepayment is to be made to
that date which coincides with the last day of the Interest Period previously
established when the LIBOR Loan, which is to be prepaid, was made, divided by
(ii) three hundred sixty (360). In addition, Borrower shall promptly pay
directly to Lender, the amount claimed as additional costs or expenses
(including, without limitation, cost of telex, wires, or cables) incurred in
connection with the prepayment, upon Borrower's receipt of a written statement
from Lender. Each prepayment of a LIBOR Loan shall be in the aggregate principal
sum of not less than Five Hundred Thousand Dollars ($500,000).
SECTION 2.5. COMMITMENT AND OTHER FEES; TERMINATION OR REDUCTION OF
COMMITMENTS.
(a) Borrower agrees to pay to Lender, as a consideration
for its Commitment hereunder, a commitment fee from the Closing Date to
and including the last day of the Commitment Period, equal to (i)
one-half percent (1/2%) per annum, times (ii) (A) the Commitment less
(B) the average daily outstanding principal amount of the Revolving
Loans, less (C) the average daily amount of all issued and outstanding
Letters of Credit. The commitment fee shall be payable monthly, in
arrears, on May 1, 1998 and on the first day of each month thereafter
and on the last day of the Commitment Period.
(b) Borrower shall pay to Lender an account
administration fee in the amount of Ten Thousand Dollars ($10,000) per
year, payable on the Closing Date and each anniversary date thereof,
during the Commitment Period.
(c) Borrower may at any time or from time to time
terminate in part the Commitment to an amount not less than the
aggregate principal amount of the Loans and Letters of Credit then
outstanding, by giving Lender not fewer than five (5) Business Days'
notice, provided that any such partial termination shall be in an
amount of One Million Dollars ($1,000,000) or any integral multiple
thereof. Each partial termination shall require the payment of a fee to
Lender in an amount equal to the amount of such partial termination,
times one-half of one percent (1/2%). After each such partial
termination, the commitment fees payable hereunder shall be calculated
upon the Commitment as so reduced. Any partial reduction in the
Commitment shall be effective during the remainder of the Commitment
Period.
(d) Borrower may at any time terminate in whole the
Commitment by (i) giving Lender no fewer than five (5) Business Days'
notice, and (ii) payment of the Termination Fee. On the effective date
of such termination (Borrower having prepaid in full the unpaid
principal balance (if any) of the Notes outstanding, together with all
interest (if any) and commitment and other fees accrued and unpaid and
provided that no
22
issued and outstanding Letters of Credit shall exist), after payment of
the Termination Fee, Lender shall xxxx all of the Notes outstanding
"Canceled" and deliver such Notes to Borrower.
SECTION 2.6. COMPUTATION OF INTEREST AND FEES; DEFAULT RATE. Interest
on Loans, Related Expenses and commitment and other fees and charges hereunder
shall be computed on the basis of a year having three hundred sixty (360) days
and calculated for the actual number of days elapsed. Anything herein to the
contrary notwithstanding, if an Event of Default shall occur hereunder, (a) the
principal of each Note and the unpaid interest thereon shall bear interest,
until paid, at the Default Rate; and (b) the fee for the aggregate undrawn face
amount of all issued and outstanding Letters of Credit shall be increased from
the fee then in effect to two percent (2%). In no event shall the rate of
interest hereunder exceed the rate allowable by law.
SECTION 2.7. MANDATORY PAYMENTS.
(a) If the sum of (a) the aggregate principal amount of
all Loans outstanding and (b) the undrawn face amount of all issued and
outstanding Letters of Credit at any time exceeds the Commitment,
Borrower shall, as promptly as practicable, but in no event to be later
than the next Business Day, prepay an aggregate principal amount of the
Loans sufficient to bring the aggregate outstanding principal amount of
all Loans and the undrawn face amount of all issued and outstanding
Letters of Credit within the Commitment.
(b) Any prepayment of a LIBOR Loan pursuant to this
Section 2.7 shall be subject to the prepayment fees set forth in
Section 2.4 hereof.
ARTICLE III. ADDITIONAL PROVISIONS RELATING TO LIBOR LOANS
SECTION 3.1. RESERVES OR DEPOSIT REQUIREMENTS, ETC. If, at any time,
any law, treaty or regulation (including, without limitation, Regulation D of
the Board of Governors of the Federal Reserve System) or the interpretation
thereof by any governmental authority charged with the administration thereof or
any central Lender or other fiscal, monetary or other authority shall impose
(whether or not having the force of law), modify or deem applicable any reserve
and/or special deposit requirement (other than reserves included in the
Eurocurrency Reserve Percentage, the effect of which is reflected in the
interest rate(s) of the LIBOR Loan(s) in question) against assets held by, or
deposits in or for the amount of any LIBOR Loan by, Lender, and the result of
the foregoing is to increase the cost (whether by incurring a cost or adding to
a cost) to Lender of making or maintaining hereunder such LIBOR Loan or to
reduce the amount of principal or interest received by Lender with respect to
such LIBOR Loan, then, upon demand by Lender, Borrower shall promptly pay to
Lender from time to time on Interest Adjustment Dates with respect to such LIBOR
Loan, as additional consideration hereunder, additional amounts sufficient to
fully compensate and indemnify Lender for such increased cost or reduced amount,
assuming (which assumption Lender need not corroborate) such additional cost or
reduced amount was allocable to such LIBOR Loan. Lender
23
shall designate a different lending office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the
judgment of Lender, be otherwise disadvantageous to Lender. A certificate as to
the increased cost or reduced amount as a result of any event mentioned in this
Section 3.1, setting forth the calculations therefor in reasonable detail, shall
be promptly submitted by Lender to Borrower and shall, in the absence of
manifest error, be conclusive and binding as to the amount thereof.
Notwithstanding any other provision of this Agreement, after any such demand for
compensation by Lender, Borrower, upon at least three (3) Business Days' prior
written notice to Lender, may prepay any affected LIBOR Loan in full or convert
such LIBOR Loan to a Prime Rate Loan regardless of the Interest Period of any
thereof. Any such prepayment or conversion shall be subject to the prepayment
fees set forth in Section 2.4 hereof. Lender shall notify Borrower as promptly
as practicable of the existence of any event which will likely require the
payment by Borrower of any such additional amount under this Section.
SECTION 3.2. TAX LAW, ETC. In the event that by reason of any law,
regulation or requirement adopted after the date hereof or in the interpretation
thereof by an official authority, or the imposition of any requirement of any
central Lender whether or not having the force of law, Lender shall, with
respect to this Agreement or any transaction under this Agreement, be subjected
to any tax, levy, impost, charge, fee, duty, deduction or withholding of any
kind whatsoever (other than any tax imposed upon or measured by the total net
income or profits of Lender or KeyBank) and if any such measures or any other
similar measure shall result in an increase in the cost to Lender of making or
maintaining any LIBOR Loan or in a reduction in the amount of principal,
interest or commitment fee receivable by Lender in respect thereof, then Lender
shall promptly notify Borrower stating the reasons therefor. Borrower shall
thereafter pay to Lender, upon demand from time to time on Interest Adjustment
Dates with respect to such LIBOR Loan, as additional consideration hereunder,
such additional amounts as shall fully compensate Lender for such increased cost
or reduced amount. Lender shall designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of Lender, be otherwise disadvantageous to Lender.
A certificate as to any such increased cost or reduced amount, setting forth the
calculations therefor in reasonable detail, shall be submitted by Lender to
Borrower and shall, in the absence of manifest error, be conclusive and binding
as to the amount thereof.
If Lender receives such additional consideration from Borrower pursuant
to this Section 3.2, Lender shall use reasonable efforts to obtain the benefits
of any refund, deduction or credit for any taxes or other amounts on account of
which such additional consideration has been paid and shall reimburse Borrower
to the extent, but only to the extent, that Lender shall receive a refund of
such taxes or other amounts together with any interest thereon or an effective
net reduction in taxes or other governmental charges (including any taxes
imposed on or measured by the total net income or profits of Lender or KeyBank)
of the United States or any state or subdivision thereof by virtue of any such
deduction or credit, after first giving effect to all other deductions and
credits otherwise available to Lender. If, at the time any audit of Lender's
income tax return is completed, Lender determines, based on such audit, that it
was not entitled to the full amount of any refund reimbursed to Borrower as
aforesaid or that its net income taxes are not reduced by a credit or deduction
for the full amount of taxes reimbursed to Borrower as aforesaid, Borrower, upon
demand of Lender, shall promptly pay to Lender the amount so
24
refunded to which Lender was not so entitled, or the amount by which the net
income taxes of Lender were not so reduced, as the case may be.
Notwithstanding any other provision of this Agreement, after any such
demand for compensation by Lender, Borrower, upon at least three (3) Business
Days' prior written notice to Lender, may prepay any affected LIBOR Loan in full
or convert such LIBOR Loan to a Prime Rate Loan regardless of the Interest
Period of any thereof. Any such prepayment or conversion shall be subject to the
prepayment fees set forth in Section 2.4 hereof.
SECTION 3.3. EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE
UNASCERTAINABLE. In respect of any LIBOR Loan, in the event that Lender shall
have determined that dollar deposits of the relevant amount for the relevant
Interest Period for such LIBOR Loan is not available to the Lender in the
applicable eurodollar market or that, by reason of circumstances affecting such
market, adequate and reasonable means do not exist for ascertaining the LIBOR
Rate applicable to such Interest Period, as the case may be, Lender shall
promptly give notice of such determination to Borrower and (a) any notice of a
new LIBOR Loan (or conversion of an existing Loan to a LIBOR Loan) previously
given by Borrower and not yet borrowed (or converted, as the case may be) shall
be deemed a notice to make a Prime Rate Loan, and (b) Borrower shall be
obligated either to prepay, or to convert to a Prime Rate Loan, any outstanding
LIBOR Loan on the last day of the then current Interest Period with respect
thereto. Lender shall designate a different lending office if such designation
will solve the problem described in this Section 3.3 and will not, in the
judgment of Lender, be otherwise disadvantageous to Lender.
SECTION 3.4. INDEMNITY. Without prejudice to any other provisions of
this Article III, Borrower hereby agrees to indemnify Lender against any loss or
expense (excluding loss of profit) which Lender may sustain or incur as a
consequence of any default by Borrower in payment when due of any amount
hereunder in respect of any LIBOR Loan, including, but not limited to, any
penalty or premium incurred by Lender in respect of funds borrowed by it for the
purpose of making or maintaining such LIBOR Loan, as determined by Lender in the
exercise of its sole but reasonable discretion. A certificate as to any such
loss or expense shall be promptly submitted by Lender to Borrower, with
reasonable detail of such loss or expense, and shall, in the absence of manifest
error, be conclusive and binding as to the amount thereof.
SECTION 3.5. CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL. If at any
time any new law, treaty or regulation, or any change in any existing law,
treaty or regulation, or any interpretation thereof by any governmental or other
regulatory authority charged with the administration thereof, shall make it
unlawful for Lender to fund any LIBOR Loan which it is committed to make
hereunder with monies obtained in the eurodollar market, the commitment of
Lender to fund such LIBOR Loan shall, upon the happening of such event forthwith
be suspended for the duration of such illegality, and Lender shall by written
notice to Borrower declare that its commitment with respect to such LIBOR Loan
has been so suspended and, if and when such illegality ceases to exist, such
suspension shall cease and Lender shall similarly notify Borrower. If any such
change shall make it unlawful for Lender to continue in effect the funding in
the applicable eurodollar market of any LIBOR Loan previously made by it
hereunder, Lender shall, upon the happening of such event, notify Borrower
thereof in writing
25
stating the reasons therefor, and Borrower shall, on the earlier of (a) the last
day of the then current Interest Period or (b) if required by such law,
regulation or interpretation, on such date as shall be specified in such notice,
either convert such LIBOR Loan to a Prime Rate Loan or prepay such LIBOR Loan in
full. Lender shall designate a different lending office if such designation will
solve the problem described in this Section 3.5 and will not, in the judgment of
Lender, be otherwise disadvantageous to Lender. Any such prepayment or
conversion shall be subject to the prepayment fees described in Section 2.4
hereof.
SECTION 3.6. FUNDING. Lender may, but shall not be required to, make
LIBOR Loans hereunder with funds obtained outside the United States.
ARTICLE IV. CONDITIONS PRECEDENT
The obligation of Lender to make its first Loan or, if earlier, to
issue the first Letter of Credit hereunder is subject to Borrower satisfying
each of the following conditions:
SECTION 4.1. NOTES. Borrower shall have executed and delivered to
Lender the Revolving Credit Note.
SECTION 4.2. GUARANTIES OF PAYMENT OF DEBT; GUARANTOR SECURITY
AGREEMENTS. A Guaranty of Payment executed and delivered by each Guarantor of
Payment, in form and substance satisfactory to Lender, shall have been delivered
to Lender. In addition, a Guarantor Security Agreement executed and delivered by
each Guarantor of Payment (except Ranger Aerospace), in form and substance
satisfactory to Lender, shall have been delivered to Lender.
SECTION 4.3. OFFICER'S CERTIFICATE, RESOLUTIONS, ORGANIZATIONAL
DOCUMENTS. Borrower and each Guarantor of Payment shall have delivered to Lender
an officer's certificate certifying the names of the officers of Borrower or
such Guarantor of Payment authorized to sign the Loan Documents, together with
the true signatures of such officers and certified copies of (a) the resolutions
of the board of directors of Borrower and each Guarantor of Payment evidencing
approval of the execution and delivery of the Loan Documents and the execution
of other Related Writings to which Borrower or such Guarantor of Payment, as the
case may be, is a party, and (b) the Articles (or Certificate) of Incorporation,
Bylaws (or Regulations) and all amendments thereto of Borrower and each
Guarantor of Payment.
SECTION 4.4. LEGAL OPINION. An opinion of counsel for Borrower and each
Guarantor of Payment, in form and substance satisfactory to Lender shall have
been delivered to Lender. In addition, Lender shall be permitted to rely on the
legal opinion delivered by the seller's legal counsel in connection with the
Share Purchase Agreement.
SECTION 4.5. GOOD STANDING CERTIFICATES. A good standing certificate
for Borrower and each Guarantor of Payment, issued on or about the Closing Date
by the Secretary of State in the state(s) where Borrower or such Guarantor of
Payment is incorporated or qualified as a foreign corporation shall have been
delivered to Lender.
26
SECTION 4.6. CLOSING FEE/LEGAL FEES. A closing fee of one percent (1%)
of the Commitment shall have been paid on the Closing Date to Lender, and all
reasonable legal fees and expenses of Lender in connection with the preparation
and negotiation of the Loan Documents shall also have been paid.
SECTION 4.7. FINANCING STATEMENTS AND LIEN SEARCHES. With respect to
the property owned or leased by Borrower and each Guarantor of Payment and any
other property securing the Debt, Borrower shall have caused to be delivered to
Lender: (a) U.C.C. financing statements satisfactory to Lender; (b) the results
of U.C.C. lien searches, satisfactory to Lender; (c) the results of federal and
state tax lien and judicial lien searches, satisfactory to Lender; and (d)
U.C.C. termination statements reflecting termination of all financing statements
previously filed by any other party having a security interest in any part of
the Collateral or any other property securing the Debt.
SECTION 4.8. ACQUISITION. The Acquisition shall have been consummated
on the terms set forth in the Share Purchase Agreement, and Borrower shall
deliver a copy of the executed Share Purchase Agreement to Lender.
SECTION 4.9. EQUITY AND DEBT. All infusions of equity and debt into
Borrower and Ranger Aerospace shall have been completed on terms satisfactory to
Lender, and Borrower shall deliver to Lender copies of all of the executed
equity and debt documents, including but not limited to the Note Purchase
Agreement.
SECTION 4.10. BANK ACCOUNTS. Such bank accounts as may be required by
Lender to fund the Loans shall have been established.
SECTION 4.11. INSURANCE CERTIFICATE. Evidence of insurance on XXXXX 27
form, and otherwise satisfactory to Lender, of adequate personal property and
liability insurance of the Companies, with Lender listed as loss payee and
additional insured shall have been delivered to Lender.
SECTION 4.12. NO MATERIAL ADVERSE CHANGE. No material adverse change,
in the opinion of Lender, shall have occurred in the financial condition,
operations or prospects of the Companies.
SECTION 4.13. MISCELLANEOUS. Borrower shall have provided such other
items and conditions as may be reasonably required by Lender.
ARTICLE V. COVENANTS
Borrower agrees that so long as the Commitment remains in effect and
thereafter until the principal of and interest on all Notes and all other
payments and fees due hereunder shall have been paid in full, Borrower shall
perform and observe, and shall cause each Subsidiary to perform and observe,
each of the following provisions:
27
SECTION 5.1. INSURANCE. Each Company shall at all times maintain
insurance upon its Inventory, equipment and other personal and real property in
such amounts, for such period, and against such risks as is adequate for the
conduct of its business and value of its properties, as reasonably determined by
Borrower, with provisions satisfactory to Lender for payment of all losses on
Collateral thereunder to Lender and such Company as their interests may appear
(loss payable endorsement in favor of Lender). Any such policies of insurance
shall provide for no fewer than thirty (30) days prior written notice of
cancellation to Lender. Any sums received by Lender in payment of insurance
losses, returns, or unearned premiums under the policies covering the Collateral
shall, during the continuance of an Event of Default, be applied upon any Debt
whether or not the same is then due and payable, and at all other times shall be
delivered to Borrower for the purpose of replacing, repairing, or restoring the
insured property. Lender is hereby authorized to act as attorney-in-fact for
Borrower in obtaining, adjusting, settling and canceling such insurance and
endorsing any drafts. In the event of failure to provide such insurance as
herein provided, Lender may, at its option, provide such insurance and Borrower
shall pay to Lender, upon demand, the cost thereof. Should Borrower fail to pay
such sum to Lender upon demand, interest shall accrue thereon, from the date of
demand until paid in full, at the Default Rate. Within ten (10) days of Lender's
written request, Borrower shall furnish to Lender such information about
Borrower's insurance as Lender may from time to time reasonably request, which
information shall be prepared in form and detail reasonably satisfactory to
Lender and certified by a Financial Officer of Borrower.
SECTION 5.2. MONEY OBLIGATIONS. Each Company shall pay in full (a)
prior in each case to the date when penalties would attach, all material taxes,
assessments and governmental charges and levies (except only those so long as
and to the extent that the same shall be contested in good faith by appropriate
and timely proceedings and for which adequate reserves have been established in
accordance with GAAP) for which it may be or become liable or to which any or
all of its properties may be or become subject, except where the failure to pay
such taxes is not reasonably likely to cause or result in a Material Adverse
Effect; (b) all of its wage obligations to its employees in compliance with the
Fair Labor Standards Act (29 U.S.C. 206-207) or any comparable provisions, which
if unpaid would be reasonably likely to cause or result in a Material Adverse
Effect; and (c) all of its other obligations calling for the payment of money
(except only those so long as and to the extent that the same shall be contested
in good faith and for which adequate reserves have been established in
accordance with GAAP) before such payment becomes overdue, which if unpaid would
be reasonably likely to cause or result in a Material Adverse Effect.
SECTION 5.3. FINANCIAL STATEMENTS. Borrower shall furnish to Lender:
(a) within thirty (30) days after the end of each month
(other than the last month of each fiscal quarter), and within
forty-five (45) days after the end of each of the first three (3)
fiscal quarters, internal balance sheets of Borrower and its
Subsidiaries as of the end of such period and statements of income
(loss), and cash flow for the month or quarter, as appropriate, and
fiscal year to date periods, all prepared on a Consolidated (and, with
respect to the quarterly financial statements, a consolidating basis),
in accordance with GAAP, and in form and detail satisfactory to Lender
and certified by a
28
Financial Officer of Borrower, together with a certificate of such
officer setting forth the Unmatured Events of Default and Events of
Default coming to such Financial Officer's attention or, if none, a
statement to that effect;
(b) within one hundred twenty (120) days after the end of
each fiscal year of Borrower, an annual audit report of Borrower and
its Subsidiaries for that year prepared on a Consolidated and
consolidating basis, in accordance with GAAP and certified in the case
of Consolidated statements by any "Big 6" accounting firm or an
independent public accountant reasonably satisfactory to Lender, which
report shall include balance sheets and statements of income (loss),
stockholders' equity and cash-flow for that period, so long as not
contrary to the then current recommendations of the American Institute
of Certified Public Accountants, together with a certificate by the
accountant setting forth the Unmatured Events of Default and Events of
Default coming to its attention during the course of its audit or, if
none, a statement to that effect;
(c) within thirty (30) days after the end of each of its
fiscal years, annual pro-forma projections for the then current fiscal
year, to be in form reasonably acceptable to Lender;
(d) with the delivery of the monthly, quarterly and
annual financial statements in (a) and (b) above, a Compliance
Certificate and a copy of any management report, letter or similar
writing furnished to the Companies by the accountants in respect of the
Companies' systems, operations, financial condition or properties;
(e) within thirty (30) days after the end of each month
(or more frequently as reasonably required by Lender), a Borrower's
Certificate prepared by a Financial Officer of Borrower;
(f) as soon as available, copies of all reports,
definitive proxy or other statements and other documents sent by a
Company to its shareholders generally, to the holders of any of its
notes, debentures or bonds or the trustee of any indenture securing the
same or pursuant to which they are issued, or sent by such Company (in
final form) to any securities exchange or over the counter authority or
system, or to the Securities and Exchange Commission or any similar
federal agency having regulatory jurisdiction over the issuance of such
Company's securities; and
(g) upon Lender's request, such other information about
the financial condition, properties and operations of any Company as
Lender may from time to time reasonably request, which information
shall be submitted in form and detail reasonably satisfactory to Lender
and certified by a Financial Officer of the Company or Companies in
question.
SECTION 5.4. FINANCIAL RECORDS. Each Company shall at all times
maintain true and complete records and books of account including, without
limiting the generality of the foregoing, appropriate reserves for possible
losses and liabilities, all in accordance with GAAP, and at all reasonable times
(during normal business hours and upon reasonable advance notice to
29
such Company) permit Lender to examine that Company's books and records and to
make excerpts therefrom and transcripts thereof.
SECTION 5.5. [Intentionally Omitted]
SECTION 5.6. ERISA COMPLIANCE. No Company shall incur any material
accumulated funding deficiency within the meaning of ERISA, or any material
liability to the PBGC, established thereunder in connection with any ERISA Plan.
Borrower shall furnish to Lender (a) as soon as possible and in any event within
thirty (30) days after any Company knows or has reason to know that any
Reportable Event with respect to any ERISA Plan has occurred, a statement of a
Financial Officer of such Company, setting forth details as to such Reportable
Event and the action which such Company proposes to take with respect thereto,
together with a copy of the notice of such Reportable Event given to the PBGC if
a copy of such notice is available to such Company, and (b) promptly after
receipt thereof, a copy of any notice such Company, or any member of the
Controlled Group may receive from the PBGC or the Internal Revenue Service with
respect to any ERISA Plan administered by such Company; provided, that this
latter clause shall not apply to notices of general application promulgated by
the PBGC or the Internal Revenue Service. Borrower shall promptly notify Lender
of any material taxes assessed, proposed to be assessed or which Borrower has
reason to believe may be assessed against a Company by the Internal Revenue
Service with respect to any ERISA Plan. As used in this Section "material" means
the measure of a matter of significance which shall be determined as being an
amount equal to five percent (5%) of the Consolidated Net Worth of Borrower. As
soon as practicable, and in any event within twenty (20) days, after any Company
becomes aware that an ERISA Event has occurred, such Company shall provide
Lender with notice of such ERISA Event with a certificate by a Financial Officer
of such Company setting forth the details of the event and the action such
Company or another Controlled Group member proposes to take with respect
thereto. Borrower shall, at the request of Lender, deliver or cause to be
delivered to Lender true and correct copies of any document relating to the
ERISA Plan of any Company.
SECTION 5.7. FINANCIAL COVENANTS.
(a) DEBT SERVICE. Borrower shall maintain at the end of
each fiscal quarter a ratio of (i) Consolidated EBITDA minus
Maintenance Capital Expenditures to (ii) scheduled payments of
Indebtedness, plus Consolidated Interest Expense payable in cash during
such period, plus cash expenditures for income taxes of no less than:
(A) 1.10 to 1.00 on the Closing Date through Xxxxx 00, 0000, (X) 1.20
to 1.00 on March 31, 1999, through March 30, 2000, and (C) 1.30 on
March 31, 2000, and thereafter, based upon the financial statements of
the Companies for the most recently completed four (4) fiscal quarters,
subject to the Proviso.
(b) LEVERAGE. Borrower shall not suffer or permit the
Leverage Ratio to exceed 8.00 to 1.00, based upon the financial
statements of the Companies for the most recently completed four (4)
fiscal quarters, subject to the Proviso.
SECTION 5.8. BORROWING. No Company shall create, incur or have
outstanding any obligation for borrowed money or any Indebtedness of any kind;
provided, that this Section
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shall not apply to the Note Purchase Agreement or prohibit any other borrowing
so long as at the time of any such incurrence (a) no Unmatured Event of Default
or Event of Default shall then exist or immediately thereafter shall begin to
exist, and (b) no "Default" under the Note Purchase Agreement shall then exist
or immediately thereafter shall begin to exist.
SECTION 5.9. LIENS. No Company shall create, assume or suffer to exist
any Lien upon any of its property or assets, whether now owned or hereafter
acquired; provided that this Section shall not apply to the following: (i) Liens
on property or assets of, or any shares of stock of or secured debt of, any
corporation existing at the time such corporation becomes a Subsidiary of a
Company or at the time such corporation is merged into a Company or any of its
Subsidiaries; provided that such Liens are not incurred in connection with, or
in contemplation of, such corporation becoming a Subsidiary of a Company or
merging into a Company or any of its Subsidiaries, (ii) Liens securing
refinancing Indebtedness; provided that any such Lien does not extend to or
cover any property, shares or debt other than the property, shares or debt
securing the Indebtedness so refunded, refinanced or extended, (iii) Liens in
favor of a Company or any of its Group Members, (iv) Liens securing industrial
revenue bonds, (v) Liens to secure purchase money indebtedness and Capitalized
Lease Obligations; provided that (a) with respect to any purchase money
indebtedness, any such Lien is created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance or refund, the cost
(including sales and excise taxes, installation and delivery charges and other
direct costs of, and other direct expenses paid or charged in connection with,
such purchase or construction) of such property, (b) with respect to any
purchase money indebtedness, the principal amount of the Indebtedness secured by
such Lien does not exceed one hundred percent (100%) of such costs, and (c) such
Lien does not extend to or cover any property other than the item of property
that is the subject of such purchase money indebtedness or Capitalized Lease
Obligation, as the case may be, and any improvements on such item, (vi)
statutory liens or landlords', carriers', warehousemen's, mechanics',
suppliers', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which do not secure any Indebtedness and with
respect to amounts not yet delinquent or being contested in good faith by
appropriate proceedings, if a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made therefor, (vii)
Liens for taxes, assessments or governmental charges that are being contested in
good faith by appropriate proceedings, (viii) Liens securing Debt under the Loan
Documents, (ix) Liens existing on the date of this Agreement (other than Liens
related to Indebtedness being released on or about the Closing Date), (x) any
extensions, substitutions, replacements or renewals of the foregoing, (xi) Liens
incurred in the ordinary course of business in connection with worker's
compensation, unemployment insurance or other forms of government insurance or
benefits, or to secure the performance of letters of credit, bids, tenders,
statutory obligations, surety and appeal bonds, leases, government contracts and
other similar obligations (other than obligations for borrowed money) entered
into in the ordinary course of business, (xii) any attachment or judgment Lien
not constituting an Event of Default under this Agreement that is being
contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with GAAP (if so required), (xiii)
Liens arising from the filing, for notice purposes only, of financing statements
in respect of operating leases, (xiv) Liens arising by operation of law in favor
of depositary banks and collecting banks, incurred in the ordinary course of
business, (xv) Liens consisting of restrictions on the transfer of securities
pursuant to applicable federal and state securities laws, (xvi) interests of
lessors and
31
licensors under leases and licenses to which a Company or any of its Group
Members is a party, (xvii) with respect to any real property occupied by a
Company or any of its Group Members, all easements, rights of way, licenses and
similar encumbrances on or defects of title that do not materially impair the
use of such property for its intended purposes, (xviii) Liens securing
Indebtedness of a foreign Subsidiary of a Company to the extent permitted under
the Note Purchase Agreement, and (xix) Liens securing Indebtedness or other
obligations in an aggregate amount not to exceed Two Hundred Fifty Thousand
Dollars ($250,000) at any one time outstanding.
SECTION 5.10. REGULATIONS U and X. No Company shall take any action
that would result in any non-compliance of the Loans with Regulations U and X of
the Board of Governors of the Federal Reserve System.
SECTION 5.11. INVESTMENTS AND LOANS. No Company shall (a) acquire any
Subsidiary, (b) make or hold any investment in any stocks, bonds or securities
of any kind, (c) be or become a party to any joint venture or other partnership,
or (d) make or keep outstanding any advance or loan to any Person; provided,
that this Section shall not prohibit such investments so long as (i) no
Unmatured Event of Default or Event of Default shall then exist or immediately
thereafter shall begin to exist, and (ii) no "Default" under the Note Purchase
Agreement shall then exist or immediately thereafter shall begin to exist.
SECTION 5.12. MERGER AND SALE OF ASSETS. No Company shall merge or
consolidate with any other Person, or sell, lease or transfer or otherwise
dispose of any Collateral or all or substantially all of its assets (as an
entirety or substantially as an entirety in one transaction or a series of
related transactions) to any Person other than in the ordinary course of
business, except that if no Unmatured Event of Default or Event of Default shall
then exist or immediately thereafter shall begin to exist:
(a) any Subsidiary may merge with (i) Borrower (provided
that Borrower shall be the continuing or surviving Person) or (ii) any
one or more Subsidiaries, provided that either (A) the continuing or
surviving Person shall be a Wholly-Owned Subsidiary which is a
Guarantor of Payment to the extent one such Subsidiary is a Guarantor
of Payment, or (B) after giving effect to any merger pursuant to this
sub-clause (ii), Borrower and/or one or more Wholly-Owned Subsidiaries
which are Guarantors of Payment shall own not less than the same
percentage of the outstanding Voting Power of the continuing or
surviving Person as Borrower and/or one or more Wholly-Owned
Subsidiaries (which are Guarantors of Payment) owned of the merged
Subsidiary immediately prior to such merger;
(b) in addition to the items permitted pursuant to
Section 5.11 hereof, any Subsidiary may sell, lease, transfer or
otherwise dispose of any of its assets to (i) Borrower, or (ii) any
Subsidiary, which is a Guarantor of Payment; or
(c) (i) Borrower or such Guarantor of Payment, as the
case may be, shall be the continuing Person, or the Person (if other
than Borrower or any Guarantor of Payment) formed by such consolidation
or into which Borrower or any such Guarantor of
32
Payment, as the case may be, is merged or to which the properties and
assets of Borrower or any such Guarantor of Payment, as the case may
be, are transferred shall be a corporation (or in the case of Borrower,
a corporation, limited liability company or a limited partnership)
organized and existing under the laws of the United States or any State
thereof or the District of Columbia and shall expressly assume in
writing all of the obligations of Borrower or such Guarantor of
Payment, as the case may be, under the Notes and this Agreement, and
the obligations under this Agreement shall remain in full force and
effect; (ii) immediately after giving effect to such transaction or
series of transactions on a pro forma basis the Consolidated Net Worth
of Borrower or the surviving entity as the case may be is at least
equal to the Consolidated Net Worth of Borrower immediately before such
transaction or series of transactions; and (iii) immediately after
giving effect to such transaction on a pro forma basis Borrower or such
Person could incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to Section 6.7 of the Note
Purchase Agreement.
SECTION 5.13. ACQUISITIONS. No Company shall acquire the assets or
stock of any other Person; provided, however, Borrower or any of its
Subsidiaries may acquire the stock or assets of another Person so long as (a)
(i) no Unmatured Event of Default or Event of Default shall then exist or
immediately thereafter shall begin to exist and (ii) no "Default" under the Note
Purchase Agreement shall then exist or immediately thereafter shall begin to
exist, and (b) in connection with all such acquisitions during the Commitment
Period Borrower does not incur in the aggregate more than Two Million Dollars
($2,000,000) of Revolving Loans hereunder to fund all or a portion of the
aggregate purchase prices thereof without the prior written consent of Lender
(which consent shall not be unreasonably withheld). For purposes of this Section
5.13, Revolving Loans to fund all or a portion of the aggregate purchase prices
for such acquisitions shall be deemed to include the proceeds of any Revolving
Loans not used for such acquisitions but which were incurred with the intent to
avoid the provisions of this Section 5.13.
SECTION 5.14. NOTICE. Borrower shall cause a Financial Officer of
Borrower to promptly notify Lender whenever any Unmatured Event of Default or
Event of Default occurs hereunder.
SECTION 5.15. ENVIRONMENTAL COMPLIANCE. Each Company shall comply in
all respects with any and all Environmental Laws including, without limitation,
all applicable Environmental Laws in jurisdictions in which any Company owns or
operates a facility or site, arranges for disposal or treatment of hazardous
substances, solid waste or other wastes, accepts for transport any hazardous
substances, solid waste or other wastes or holds any interest in real property
or otherwise, except to the extent that the failure to comply therewith would
not reasonably be likely to cause or result in a Material Adverse Effect.
Borrower shall furnish to Lender, promptly after receipt thereof, a copy of any
written notice any Company may receive from any governmental authority or
private Person or otherwise that any material litigation or proceeding
pertaining to any environmental, health or safety matter has been filed or is
threatened against such Company, with respect to any real property in which such
Company holds any interest or any past or present operation of such Company. No
Company shall allow the release or disposal of hazardous waste, solid waste or
other wastes on, under or to any real property in which any Company holds any
interest or performs any of its operations, in violation
33
of any Environmental Law, except to the extent that the failure to comply
therewith would not reasonably be likely to cause or result in a Material
Adverse Effect. As used in this Section, "litigation or proceeding" means any
demand, claim, notice, suit, suit in equity action, administrative action,
investigation or inquiry whether brought by any governmental authority or
private Person or otherwise. Borrower shall defend, indemnify and hold Lender
harmless against all costs, expenses, claims, damages, penalties and liabilities
of every kind or nature whatsoever (including attorneys fees) arising out of or
resulting from the noncompliance of any Company with any Environmental Law;
provided that Lender shall not have the right to be indemnified under this
Section 5.15 for its own gross negligence or willful misconduct as determined by
a court of competent jurisdiction.
SECTION 5.16. AFFILIATE TRANSACTIONS. No Company shall, or shall permit
any Subsidiary to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
a Company, except for (i) a transaction between or among a Company and/or its
Wholly-Owned Subsidiaries, (ii) a transaction the terms of which are at least as
favorable as the terms which could be obtained by a Company in a comparable
transaction made on an arm's-length basis between unaffiliated parties, (iii)
any Capital Distribution that is not prohibited by Section 5.19 hereof, (iv) any
transaction pursuant to an agreement, arrangement or understanding existing on
the date hereof and described in Schedule 5.16 hereto, (v) any transaction,
approved by the Board of Directors of Borrower, with an officer or director of
Borrower or of any Subsidiary in his or her capacity as officer or director
entered into in the ordinary course of business, (vi) transactions permitted by
Section 5.12 hereof, (vii) any "Restricted Payment" as defined in and as
permitted under the Note Purchase Agreement or (viii) the payment of customary
and reasonable directors' fees to directors who are not employees of a Company
or any Affiliate of a Company. For purposes of this provision, "Affiliate" shall
mean any Person, directly or indirectly, controlling, controlled by or under
common control with a Company and" control" (including the correlative meanings,
the terms "controlling", "controlled by" and "under common control with") means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Company, whether through the
ownership of voting securities, by contract or otherwise.
SECTION 5.17. USE OF PROCEEDS. Borrower's use of the proceeds of the
Revolving Credit Notes shall be solely for working capital and other general
corporate purposes of Borrower and its Subsidiaries, including acquisitions to
the extent permitted hereunder.
SECTION 5.18. CORPORATE NAMES AND LOCATION OF COLLATERAL. No Obligor
shall change its corporate name, unless, in each case, such Obligor shall
provide Lender with at least thirty (30) days prior written notice thereof. No
Obligor shall use trade names, assumed names or fictitious names without giving
Lender at least thirty (30) days prior written notice thereof. Borrower shall
also provide Lender with at least fifteen (15) days prior written notification
of: (a) any change in any location where any material portion of an Obligor's
Inventory is maintained, and any new locations where any Obligor's Inventory is
to be maintained; (b) any change in the location of the office where any
Obligor's records pertaining to its Accounts are kept; (c) the location of any
new places of business and the changing or closing of any of its existing places
of business; and (d) any change in any Obligor's chief executive
34
office. In the event of any of the foregoing, Borrower shall promptly execute
and deliver to Lender (and Borrower agrees that Lender may execute and deliver
the same as Borrower's irrevocable attorney-in-fact) new U.C.C. financing
statements describing the Collateral and otherwise in form and substance
sufficient for recordation wherever necessary or appropriate, as determined in
Lender's sole discretion, to perfect or continue perfected Lender's security
interest in the Collateral, based upon such new places of business or names, and
Borrower shall pay all filing and recording fees and taxes in connection with
the filing or recordation of such financing statements and shall immediately
reimburse Lender therefor if Lender pays the same. Such amounts shall be Related
Expenses hereunder.
SECTION 5.19. CAPITAL DISTRIBUTIONS. Borrower shall not pay or commit
itself to pay any Capital Distributions at any time; provided, however, this
Section 5.19 shall not prohibit: (i) the payment of any distribution within
sixty (60) days after the date of declaration thereof, if at such date of
declaration such payment would comply with the provisions of this Agreement;
(ii) the repurchase, redemption or other acquisition or retirement of any shares
of Capital Stock of a Company or, by conversion into, or by or in exchange for,
shares of Capital Stock (other than Disqualified Capital Stock), or out of, the
net proceeds of the substantially concurrent sale (other than to a Subsidiary of
a Company or a Restricted Joint Venture) of other shares of Capital Stock of a
Company (other than Disqualified Capital Stock); (iii) the retirement of any
shares of Disqualified Capital Stock of a Company by conversion into, or by
exchange for, shares of Disqualified Capital Stock of a Company, or out of the
net proceeds of the substantially concurrent sale (other than to a Subsidiary of
a Company or a Restricted Joint Venture) of other shares of Disqualified Capital
Stock of a Company that (A) is subordinated to the Notes to at least the same
extent as the Disqualified Capital Stock being retired, (B) is scheduled to be
mandatorily redeemed, if at all, either (I) no earlier than the Disqualified
Capital Stock being retired, or (II) after the maturity date of the Notes, (C)
the portion, if any, of which Disqualified Capital Stock that is scheduled to be
mandatorily redeemed on or prior to the maturity date of the Notes has a
weighted average life to mandatory redemption at the time such Disqualified
Capital Stock is issued that is equal to or greater than the weighted average
life to mandatory redemption of the portion of the Disqualified Capital Stock
being retired that is scheduled to be mandatorily redeemed on or prior to the
maturity date of the Notes, and has an aggregate liquidation preference that is
equal to or less than the sum of (a) the aggregate liquidation preference then
outstanding of the Disqualified Capital Stock being retired, (b) the amount of
accrued and unpaid dividends, if any, and premiums owed, if any, not in excess
of preexisting redemption provisions on such Disqualified Capital Stock being
retired and (c) the amount of customary fees, expenses and costs related to the
issuance of such Disqualified Capital Stock; (iv) payments to CIBC Xxxxxxxxxxx
Corp., Tioga Capital Corporation or their respective Affiliates representing
customary investment banking fees for services rendered; (v) payments to Xxxx
Xxxxxxx Mutual Life Insurance Company representing insurance premiums not in
excess of prevailing market rates; (vi) payments to Tioga Capital Corporation of
a chairman's fee pursuant to the investment agreement in effect on the date
hereof; (vii) the payment of distributions to Ranger Aerospace solely for the
purpose of enabling Ranger Aerospace to pay its reasonable, ordinary course
operating and administrative expenses, the amount of which in any fiscal year
shall not exceed Two Hundred Thousand Dollars ($200,000), and to pay its taxes;
and (viii) so long as no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such payment,
the payment or distributions to Ranger
35
Aerospace for the sole purpose of purchasing, redeeming or otherwise acquiring
for value shares of Capital Stock of Ranger Aerospace (other than Disqualified
Capital Stock) or options on such shares held by Ranger Aerospace's, Borrower's
or its Subsidiaries' officers or employees or former officers or employees (or
their estates or beneficiaries under their estates) upon the death, disability,
retirement or termination of employment of such current or former officers or
employees pursuant to the terms of an employee benefit plan or any other
agreement pursuant to which such shares of Capital Stock or options were issued
or pursuant to a severance, buy-sell or right of first refusal agreement with
such current or former officer or employee; provided that the aggregate cash
consideration paid, or cash distributions or payments made, pursuant to this
clause (viii) shall not exceed Two Hundred Fifty Thousand Dollars ($250,000) in
any fiscal year; provided, further, that a Company may carry over and make for
one fiscal year, the amount of such distributions permitted to have been made,
but not made, in the immediately preceding fiscal year; provided, further, that
such distributions in any fiscal year of Borrower shall be deemed made first
from the aforementioned permitted amount for such fiscal year and then from any
amount carried over into such fiscal year in accordance with this proviso.
SECTION 5.20. SUBSIDIARY GUARANTIES. Each United States domestic
Subsidiary of a Company created, acquired or held subsequent to the Closing
Date, shall immediately execute and deliver to Lender a Guaranty of Payment of
all of the Debt, and, if requested by Lender, a security agreement covering all
Collateral of such Guarantor, as security for the Debt, such agreements to be in
form and substance substantially similar to the existing Loan Documents, along
with such corporate governance and authorization documents and an opinion of
counsel as may be deemed necessary or advisable by Lender.
SECTION 5.21. COLLATERAL. Borrower shall:
(a) at all reasonable times (during normal business hours
and with reasonable advance notice) allow Lender by or through any of
its officers, agents, employees, attorneys, or accountants to (i)
examine, inspect, and make extracts from Borrower's books and other
records, including, without limitation, the tax returns of Borrower;
(ii) arrange for verification of Borrower's Accounts, under reasonable
procedures, directly with Account Debtors or by other methods after
consultation with Borrower; and (iii) examine, inspect or perform
audits or appraisals of Borrower's Collateral, wherever located;
(b) promptly furnish to Lender upon request (i)
additional statements and information with respect to the Collateral,
and all writings and information relating to or evidencing any of
Borrower's Accounts (including, without limitation, computer printouts
or typewritten reports listing the mailing addresses of all present
Account Debtors), and (ii) any other writings and information as Lender
may reasonably request;
(c) notify Lender in writing promptly upon the creation
of any material amount of Accounts with respect to which the Account
Debtor is the United States of America or any state, city, county or
other governmental authority or any department, agency or
instrumentality of any of them, or any foreign government or
instrumentality thereof or any business which is located in a foreign
country;
36
(d) at the request of Lender, xxxx its books and records
of Accounts to indicate the security interest granted to Lender
hereunder;
(e) promptly notify Lender in writing of any information
which Borrower has or may receive with respect to the Collateral which
might in any manner materially and adversely affect the value thereof
or the rights of Lender with respect thereto; and
(f) upon request of Lender, promptly take such action and
promptly make, execute, and deliver all such additional and further
items, deeds, assurances, and instruments as Lender may require,
including, without limitation, U.C.C. financing statements, so as to
completely vest in and ensure to Lender its rights hereunder and in or
to the Collateral.
A carbon, photographic, or other reproduction of this Agreement may, at
the option of Lender, be used as a financing statement. If certificates of title
or applications for title are issued or outstanding with respect to any of
Borrower's Inventory, Borrower shall deliver such certificate or application to
Lender and cause the interest of Lender to be properly noted thereon. Borrower
hereby authorizes Lender or Lender's designated agent (but without obligation by
Lender to do so) to incur Related Expenses (whether prior to, upon, or
subsequent to any Unmatured Event of Default or Event of Default), and Borrower
shall promptly repay, reimburse, and indemnify Lender for any and all Related
Expenses. All Related Expenses are payable to Lender promptly after demand
therefor; if such Related Expenses are not paid promptly, Lender may, at its
option, debit Related Expenses directly to the Revolving Credit Note or any
other Note.
SECTION 5.22. BANKING RELATIONSHIP. Commencing within a reasonable time
period after the Closing Date, Borrower shall consider maintaining its primary
banking and depository relationship with Lender or KeyBank.
ARTICLE VI. SECURITY
SECTION 6.1. SECURITY INTEREST IN COLLATERAL. In consideration of and
as security for the full and complete payment of all of the Debt, Borrower does
hereby grant to Lender a security interest in and an assignment of the
Collateral.
SECTION 6.2. COLLECTIONS AND RECEIPT OF PROCEEDS BY BORROWER. During
the continuance of an Event of Default and upon written notice to Borrower from
Lender, a Cash Collateral Account shall be opened by Borrower at the main office
of Lender and all such lawful collections of Borrower's Accounts and such
Proceeds of Borrower's Accounts and Inventory shall be remitted daily by
Borrower to Lender in the form in which they are received by Borrower, either by
mailing or by delivering such collections and Proceeds to Lender, appropriately
endorsed for deposit in the Cash Collateral Account. In the event that such
notice is given to Borrower from Lender, during the continuance of an Event of
Default, Borrower shall not commingle such collections or Proceeds with any of
Borrower's other funds or property, but
37
shall hold such collections and Proceeds separate and apart therefrom upon an
express trust for Lender. In such case, Lender may, in its sole discretion, at
any time and from time to time during the continuance of an Event of Default,
apply all or any portion of the account balance in the Cash Collateral Account
as a credit against (i) the outstanding principal or interest of any Note or
Notes, or (ii) any other Debt. If any remittance shall be dishonored, or if,
upon final payment, any claim with respect thereto shall be made against Lender
on its warranties of collection, Lender may charge the amount of such item
against the Cash Collateral Account or any other Deposit Account maintained by
Borrower with Lender, and, in any event, retain the same and Borrower's interest
therein as additional security for the Debt. Lender may, in its sole discretion,
at any time and from time to time during the continuance of an Event of Default,
release funds from the Cash Collateral Account to Borrower for use in Borrower's
business and Lender shall release such funds to Borrower at all times when no
Event of Default shall exist. The balance in the Cash Collateral Account may be
withdrawn by Borrower upon termination of this Agreement and payment in full of
all of the Debt or at any time that no Event of Default is in existence. At
Lender's request, during the continuance of an Event of Default, Borrower shall
cause all remittances representing collections and Proceeds of Collateral to be
mailed to a lock box to which Lender shall have access for the processing of
such items in accordance with the provisions, terms, and conditions of Lender's
customary lock box agreement. The provisions of this Section 6.2 shall only
apply during the continuance of any Event of Default.
Lender, or Lender's designated agent, is hereby constituted and
appointed Borrower's attorney-in-fact with authority and power to endorse any
and all instruments, documents, and chattel paper upon Borrower's failure to do
so. Such authority and power, being coupled with an interest, shall be (A)
irrevocable until all of the Debt is paid, (B) exercisable by Lender at any time
during the continuance of an Event of Default and without any request upon
Borrower by Lender to so endorse, and (C) exercisable during the continuance of
an Event of Default in Lender's name or Borrower's name. Borrower hereby waives
presentment, demand, notice of dishonor, protest, notice of protest, and any and
all other similar notices with respect thereto, regardless of the form of any
endorsement thereof. Lender shall not be bound or obligated to take any action
to preserve any rights therein against prior parties thereto.
SECTION 6.3. COLLECTIONS AND RECEIPT OF PROCEEDS BY LENDER. Borrower
hereby constitutes and appoints Lender, or Lender's designated agent, as
Borrower's attorney-in-fact to exercise, at any time during the continuance of
an Event of Default, all or any of the following powers which, being coupled
with an interest, shall be irrevocable until the complete and full payment of
all of the Debt:
(a) to receive, retain, acquire, take, endorse, assign,
deliver, accept, and deposit, in Lender's name or Borrower's name, any
and all of Borrower's cash, instruments, chattel paper, documents,
Proceeds of Accounts, Proceeds of Inventory, collection of Accounts,
and any other writings in each case to the extent relating to any of
the Collateral;
(b) to transmit to Account Debtors, on any or all of
Borrower's Accounts, notice of assignment to Lender thereof and
Lender's security interest therein and to request from such Account
Debtors at any time, in Lender's name or in Borrower's name,
38
information concerning Borrower's Accounts and the amounts owing
thereon;
(c) to transmit to purchasers of any or all of Borrower's
Inventory, notice of Lender's security interest therein, and to request
from such purchasers at any time, in Lender's name or in Borrower's
name, information concerning Borrower's Inventory and the amounts owing
thereon by such purchasers;
(d) to notify and require Account Debtors on Borrower's
Accounts and purchasers of Borrower's Inventory to make payment of
their indebtedness directly to Lender;
(e) to take or bring, in Lender's name or Borrower's
name, all steps, actions, suits, or proceedings deemed by Lender
necessary or desirable to effect the receipt, enforcement, and
collection of the Collateral; and
(f) to accept all collections in any form relating to the
Collateral, including remittances which may reflect deductions, and to
deposit the same into Borrower's Cash Collateral Account or, at the
option of Lender, to apply them as a payment against any Note or Notes
or any other Debt.
SECTION 6.4. USE OF INVENTORY. Until any Event of Default shall occur
and be continuing, Borrower may: (a) retain possession of and use its Inventory
in any lawful manner not inconsistent with this Agreement or with the terms,
conditions, or provisions of any policy of insurance thereon; (b) sell or lease
its Inventory in the ordinary course of business; provided, however, that a sale
or lease in the ordinary course of business does not include a transfer in
partial or total satisfaction of an Indebtedness, except for transfers in
satisfaction of partial or total purchase money prepayments by a buyer in the
ordinary course of Borrower's business; and (c) use and consume any raw
materials or supplies, the use and consumption of which are necessary in order
to carry on Borrower's business.
ARTICLE VII. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that the statements set forth in this
Article VII are true, correct and complete.
SECTION 7.1. CORPORATE EXISTENCE; SUBSIDIARIES; FOREIGN QUALIFICATION.
Each Company is a corporation duly organized, validly existing, and in good
standing under the laws of its state of incorporation and is duly qualified and
authorized to do business and is in good standing as a foreign corporation in
all of the states or jurisdictions where the character of its property or its
business activities makes such qualification necessary, except where the failure
to so qualify is not reasonably likely to cause or result in a Material Adverse
Effect. As of the date hereof, Schedule 7.1 sets forth each Subsidiary and each
Person which is an owner of Borrower's stock, its state of incorporation, its
relationship to Borrower, including the percentage of each class of stock owned
by a Company or the percentage of stock of Borrower owned by it, the location of
its chief executive offices and its principal place of business.
39
SECTION 7.2. CORPORATE AUTHORITY. Borrower has the right and power and
is duly authorized and empowered to enter into, execute and deliver the Loan
Documents to which it is a party and to perform and observe the provisions of
the Loan Documents. The Loan Documents to which Borrower is a party have been
duly authorized and approved by Borrower's Board of Directors and are the valid
and binding obligations of Borrower, enforceable against Borrower in accordance
with their respective terms except (i) that the enforcement hereof may be
subject to bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and to general principles of equity and the
discretion of the court before which any proceeding therefor may be brought and
(ii) as any rights to indemnity hereunder may be limited by applicable law. The
execution, delivery and performance of the Loan Documents will not conflict with
nor result in any breach in any of the provisions of, or constitute a default
under, or result in the creation of any Lien (other than Liens permitted under
Section 5.9 of this Agreement) upon any assets or property of Borrower under the
provisions of Borrower's Articles (or Certificate) of Incorporation, Bylaws (or
Regulations) or any material agreement binding upon Borrower.
SECTION 7.3. COMPLIANCE WITH LAWS. Each Company:
(a) holds permits, certificates, licenses, orders,
registrations, franchises, authorizations, and other approvals from
federal, state, local, and foreign governmental and regulatory bodies
necessary for the conduct of its business and is in compliance with all
applicable laws relating thereto, except to the extent that the failure
to hold any such permit, certificate, license, order, registration,
franchise, authorization or approval is not reasonably likely to cause
or result in a Material Adverse Effect or as disclosed on Schedule 7.3;
and
(b) is in compliance with all federal, state, local, or
foreign applicable statutes, rules, regulations, and orders including,
without limitation, those relating to equal employment practices,
except to the extent the failure to so comply is not reasonably likely
to cause or result in a Material Adverse Effect or as disclosed on
Schedule 7.3.
SECTION 7.4. LITIGATION AND ADMINISTRATIVE PROCEEDINGS. Except as to
any of the following matters, any such matter which, if determined adversely, is
not reasonably likely to cause or result in a Material Adverse Effect, there are
(a) no lawsuits, actions, investigations, or other proceedings pending or
threatened against Borrower or any of its Subsidiaries, or in respect of which
Borrower or any of its Subsidiaries may have any liability, in any court or
before any governmental authority, arbitration board, or other tribunal, (b) no
orders, writs, injunctions, judgments, or decrees of any court or government
agency or instrumentality to which any Company is a party or by which the
property or assets of any Company are bound, and (c) no grievances, disputes, or
controversies outstanding with any union or other organization of the employees
of any Company, or threats of work stoppage, strike, or pending demands for
collective bargaining.
40
SECTION 7.5. LOCATIONS. As of the date hereof, the chief executive
office of each Obligor is set forth on Schedule 7.5 attached hereto and made a
part hereof. As of the date hereof, the office where each Obligor keeps its
records concerning its Accounts is set forth on Schedule 7.5. As of the date
hereof, the Companies have places of business or maintain their Inventory at the
locations set forth on Schedule 7.5.
SECTION 7.6. TITLE TO ASSETS. Each Obligor has good title to and
ownership of all material property it purports to own, which property is free
and clear of all Liens, except those permitted under Section 5.9 hereto.
SECTION 7.7. LIENS AND SECURITY INTERESTS. On and after the Closing
Date, except for Liens permitted pursuant to Section 5.9 hereof, (a) there is no
financing statement outstanding covering any personal property of any Company,
other than a financing statement in favor of Lender, if any, and in connection
with the Indebtedness being released on the Closing Date which will be filed
shortly thereafter; (b) there is no mortgage outstanding covering any real
property of any Company, other than a mortgage in favor of Lender, if any; and
(c) no real or personal property of any Company is subject to any security
interest or Lien of any kind other than any security interest or Lien which may
be granted to Lender. Upon the filing of the appropriate financing statements,
Lender has a valid and enforceable first security interest in the Collateral,
subject to Liens permitted under Section 5.9 hereof. On and after the Closing
Date, neither Borrower nor any Subsidiary has entered into any contract or
agreement which would prohibit Lender from acquiring a security interest,
mortgage or other Lien on, or a collateral assignment of, any of the property or
assets of Borrower and/or any of its Subsidiaries except for (i) the Note
Purchase Agreement, (ii) any contract or agreement in connection with any
Capitalized Lease Obligation or purchase money indebtedness or (iii) any
contract or agreement in connection with any financing provided to a foreign
Subsidiary of Borrower.
SECTION 7.8. TAX RETURNS. All federal, state and local tax returns and
other material reports required by law to be filed in respect of the income,
business, properties and employees of each Company have been filed and all
taxes, assessments, fees and other governmental charges which are due and
payable have been paid, except as otherwise permitted herein or the failure to
do so does not and is not reasonably likely to cause or result in a Material
Adverse Effect. The provision for taxes on the books of Borrower is adequate for
all years not closed by applicable statutes and for the current fiscal year.
SECTION 7.9. ENVIRONMENTAL LAWS. Each Company is in compliance with any
and all Environmental Laws including, without limitation, all Environmental Laws
in all jurisdictions in which any Company owns or operates, or has owned or
operated, a facility or site, arranges or has arranged for disposal or treatment
of hazardous substances, solid waste or other wastes, accepts or has accepted
for transport any hazardous substances, solid waste or other wastes or holds or
has held any interest in real property or otherwise, except to the extent that
the failure to so comply is not reasonably likely to cause or result in a
Material Adverse Effect. Except as set forth in Schedule 7.9, no litigation or
proceeding arising under, relating to or in connection with any Environmental
Law is pending or, to the best knowledge of each Company, threatened against any
Company, with respect to any real property in which any Company holds or has
held an interest or any past or present operation of any Company, except to the
extent that any such litigation or proceeding is not reasonably likely to cause
or result in a Material Adverse
41
Effect. No release, threatened release or disposal of hazardous waste, solid
waste or other wastes is occurring, or has occurred (other than those that are
currently being cleaned up in accordance with Environmental Laws), on, under or
to any real property in which any Company holds any interest or performs any of
its operations, in violation of any Environmental Law, except to the extent that
such violation is not reasonably likely to cause or result in a Material Adverse
Effect. As used in this Section, "litigation or proceeding" means any demand,
claim, notice, suit, suit in equity, action, administrative action,
investigation or inquiry whether brought by any governmental authority or
private Person or otherwise.
SECTION 7.10. CONTINUED BUSINESS. There exists no actual, pending, or,
to Borrower's knowledge, any threatened termination, cancellation or limitation
of, or any adverse modification or change in the business relationship of any
Company and any customer or supplier, or any group of customers or suppliers,
whose purchases or supplies, individually or in the aggregate, are material to
the business of the Companies taken as a whole, and if terminated would be
reasonably likely to cause or result in a Material Adverse Effect, and as of the
Closing Date, to the knowledge of Borrower, there exists no present condition or
state of facts or circumstances which would materially affect adversely any
Company in any respect or prevent a Company from conducting such business or the
transactions contemplated by this Agreement in substantially the same manner
which it was theretofore conducted.
SECTION 7.11. EMPLOYEE BENEFITS PLANS. No ERISA Event has occurred or
is expected to occur with respect to an ERISA Plan. Full payment has been made
of all amounts which a Controlled Group member is required, under applicable law
or under the governing documents, to have been paid as a contribution to or a
benefit under each ERISA Plan. The liability of each Controlled Group member
with respect to each ERISA Plan has been fully funded based upon reasonable and
proper actuarial assumptions, has been fully insured, or has been fully reserved
for on its financial statements. No changes have occurred or are expected to
occur that would cause a material increase in the cost of providing benefits
under the ERISA Plan. With respect to each ERISA Plan that is intended to be
qualified under Code Section 401(a): (a) the ERISA Plan and any associated trust
operationally comply with the applicable requirements of Code Section 401(a),
(b) the ERISA Plan and any associated trust have been amended to comply with all
such requirements as currently in effect, other than those requirements for
which a retroactive amendment can be made within the "remedial amendment period"
available under Code Section 401(b) (as extended under Treasury Regulations and
other Treasury pronouncements upon which taxpayers may rely), (c) the ERISA Plan
and any associated trust have received a favorable determination letter from the
Internal Revenue Service stating that the ERISA Plan qualifies under Code
Section 401(a), that the associated trust qualifies under Code Section 501(a)
and, if applicable, that any cash or deferred arrangement under the ERISA Plan
qualifies under Code Section 401(k), unless the ERISA Plan was first adopted at
a time for which the above-described "remedial amendment period" has not yet
expired, (d) the ERISA Plan currently satisfies the requirements of Code Section
410(b), without regard to any retroactive amendment that may be made within the
above-described "remedial amendment period," and (e) no contribution made to the
ERISA Plan is subject to an excise tax under Code Section 4972. With respect to
any Pension Plan, the "accumulated benefit obligation" of Controlled Group
members with respect to the Pension Plan (as determined in accordance with
Statement of Accounting Standards No. 87, "Employers' Accounting for
42
Pensions") does not exceed the fair market value of Pension Plan assets by an
amount more than Two Hundred Fifty Thousand Dollars ($250,000). The aggregate
potential amount of liability that would result if all Controlled Group members
withdrew from all Multiemployer Plans in a "complete withdrawal" (within the
meaning of ERISA Section 4203) would not be reasonably likely to cause or result
in a Material Adverse Effect.
SECTION 7.12. CONSENTS OR APPROVALS. Except for filings in connection
with the security interests and Liens in favor of Lender and except as disclosed
on Schedule 7.12 and ordinary course permits, licenses and approvals for
operations, no consent, approval or authorization of, or filing, registration or
qualification with, any governmental authority or any other Person is required
to be obtained or completed by Borrower in connection with the execution,
delivery or performance of any of the Loan Documents, which has not already been
obtained or completed.
SECTION 7.13. SOLVENCY. Borrower has received consideration which is
the reasonable equivalent value of the obligations and liabilities that Borrower
has incurred to Lender. Borrower is not insolvent as defined in any applicable
state or federal statute, nor will Borrower be rendered insolvent by the
execution and delivery of the Loan Documents to Lender. Borrower is not engaged
or about to engage in any business or transaction for which the assets retained
by it will be an unreasonably small amount of capital, taking into consideration
the obligations to Lender incurred hereunder. Borrower does not intend to, nor
does it believe that it will, incur debts beyond its ability to pay such debts
as they mature.
SECTION 7.14. NO MATERIAL ADVERSE CHANGE. Since December 31, 1997,
there has been no Material Adverse Change (other than the Acquisition, the
issuance of the notes under the Note Purchase Agreement and the transactions
contemplated by the Loan Documents) nor any change in any Company's accounting
procedures.
SECTION 7.15. REGULATIONS. Borrower is not engaged principally or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any "margin stock" (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System of the
United States of America). Neither the granting of any Loan (or any conversion
thereof) nor the use of the proceeds of any Loan will violate, or be
inconsistent with, the provisions of Regulation U or X of said Board of
Governors.
SECTION 7.16. [Intentionally Omitted]
SECTION 7.17. INTELLECTUAL PROPERTY. Each Company owns, possesses, or
has the right to use all of the material patents, patent applications,
trademarks, service marks, copyrights, licenses and material rights with respect
to the foregoing necessary for the conduct of its business without any known
conflict with the rights of others, except to the extent that the failure to
own, possess or have the right to use such items would not be reasonably likely
to cause or result in a Material Adverse Effect.
SECTION 7.18. INSURANCE. Each Company maintains with financially sound
and reputable insurers insurance with coverage and limits as required by law and
as is adequate for the conduct of its business and the value of its properties.
43
SECTION 7.19. ACCURATE AND COMPLETE STATEMENTS. Neither the Loan
Documents nor any written statement made by any Company in connection with any
of the Loan Documents (other than budgets and projections except as provided in
the last sentence of this Section 7.19) contains any untrue statement of a
material fact or omits a material fact necessary to make the statements
contained therein or in the Loan Documents not misleading at the time made in
light of all of the circumstances in which made. After due inquiry by Borrower,
there is no known fact which any Company has not disclosed to Lender which is
reasonably likely to cause or result in a Material Adverse Effect. The financial
projections furnished by Borrower to Lender (copies of which are attached hereto
as Schedule 7.19) were prepared in good faith on the basis of information and
assumptions that Borrower believed to be reasonable at the time made and as of
the Closing Date, in light of all of the circumstances existing at such times,
it being understood that projections are not to be viewed as facts or
representations as to future performance and that actual results may differ from
such projections and that such differences may be material.
SECTION 7.20. YEAR 2000 COMPLIANCE. Each Company's Computer Systems
are, or have been or will be modified to be, Year 2000 Compliant, except to the
extent that noncompliance is not reasonably likely to cause or result in a
Material Adverse Effect.
SECTION 7.21. DEFAULTS. No Unmatured Event of Default or Event of
Default exists hereunder, nor will any begin to exist immediately after the
execution and delivery hereof.
ARTICLE VIII. EVENTS OF DEFAULT
Each of the following shall constitute an Event of Default hereunder:
SECTION 8.1. PAYMENTS. If the principal of or interest on any Note or
any commitment or other fee shall not be paid in full punctually when due and
payable or within one (1) Business Day thereof.
SECTION 8.2. SPECIAL COVENANTS. If any Company or any Obligor shall
fail or omit to perform and observe Sections 5.7, 5.8, 5.9, 5.11, 5.12, 5.13 or
5.19 hereof.
SECTION 8.3. OTHER COVENANTS. If any Company or any Obligor shall fail
or omit to perform and observe any agreement or other provision (other than
those referred to in Sections 8.1 or 8.2 hereof) contained or referred to in
this Agreement or any Related Writing that is on such Company's or such
Obligor's part, as the case may be, to be complied with, and that Unmatured
Event of Default shall not have been fully corrected within thirty (30) days
after the giving of written notice thereof to Borrower by Lender that the
specified Unmatured Event of Default is to be remedied.
SECTION 8.4. REPRESENTATIONS AND WARRANTIES. If any representation,
warranty or statement made in or pursuant to this Agreement or any Related
Writing or any other
44
material information furnished by any Company or any Obligor to Lender or any
other holder of any Note pursuant to the terms of any Loan Document or Related
Writing, shall be false or erroneous in any material respect as of the date
made.
SECTION 8.5. CROSS DEFAULT. If any Company or any Obligor shall default
in the payment of principal or interest due and owing upon any other obligation
for borrowed money in excess of One Million Dollars ($1,000,000) beyond any
period of grace provided with respect thereto or in the performance or
observance of any other agreement, term or condition contained in any agreement
under which such obligation is created, if the effect of such default is to
allow the acceleration of the maturity of such Indebtedness or to permit the
holder thereof to cause such Indebtedness to become due prior to its stated
maturity.
SECTION 8.6. ERISA DEFAULT. The occurrence of one or more ERISA Events
which (a) are reasonably likely to cause or result in a Material Adverse Effect,
or (b) result in a material Lien on any of the assets of any Company.
SECTION 8.7. CHANGE IN OWNERSHIP/CONTROL. If (a) Ranger Aerospace shall
cease to own one hundred percent (100%) of the outstanding stock of Borrower
(other than in connection with a merger permitted by Section 5.12 or among
Ranger Aerospace and Borrower), or (b) a "Change of Control" (as defined in the
Note Purchase Agreement) shall have occurred.
SECTION 8.8. MONEY JUDGMENT. A final judgment or order for the payment
of money in excess of One Million Dollars ($1,000,000) (to the extent not
covered by insurance) shall be rendered against any Company or any Obligor by a
court of competent jurisdiction, which remains unpaid or unstayed and
undischarged for a period (during which execution shall not be effectively
stayed) of sixty (60) days after the date on which the right to appeal has
expired.
SECTION 8.9. [Intentionally Omitted]
SECTION 8.10. VALIDITY OF LOAN DOCUMENTS. (a) Any material provision,
in the sole opinion of Lender, of any Loan Document shall at any time for any
reason cease to be valid, binding and enforceable against Borrower or any
Guarantor of Payment; (b) the validity, binding effect or enforceability of any
Loan Document against Borrower or any Guarantor of Payment shall be contested by
any Company or any other Obligor; (c) Borrower or any Guarantor of Payment shall
deny that it has any or further liability or obligation thereunder except in the
case of payment; or (d) any Loan Document shall be terminated other than in
accordance with its terms, invalidated or set aside, or be declared ineffective
or inoperative or in any way cease to give or provide to Lender the material
benefits purported to be created thereby.
SECTION 8.11. SOLVENCY. If Borrower shall discontinue business or any
Company or any Obligor shall (a) generally not pay its debts as such debts
become due, (b) make a general assignment for the benefit of creditors, (c)
apply for or consent to the appointment of a receiver, a custodian, a trustee,
an interim trustee or liquidator of all or substantially all of its assets, (d)
be adjudicated a debtor or have entered against it an order for relief under
Title 11 of the United States Code, as the same may be amended from time to
time, and permit such to continue
45
unstayed and in effect for sixty (60) consecutive days, (e) file a voluntary
petition in bankruptcy or file a petition or an answer seeking reorganization or
an arrangement with creditors or seeking to take advantage of any other law
(whether federal or state) relating to relief of debtors, or admit (by answer,
by default or otherwise) the material allegations of a petition filed against it
in any bankruptcy, reorganization, insolvency or other proceeding (whether
federal or state) relating to relief of debtors, (f) suffer or permit to
continue unstayed and in effect for sixty (60) consecutive days any judgment,
decree or order entered by a court of competent jurisdiction, which approves a
petition seeking its reorganization or appoints a receiver, custodian, trustee,
interim trustee or liquidator of all or substantially all of its assets, or (g)
take, or omit to take, any action in order thereby to effect any of the
foregoing.
ARTICLE IX. REMEDIES UPON DEFAULT
Notwithstanding any contrary provision or inference herein or
elsewhere,
SECTION 9.1. OPTIONAL DEFAULTS. If any Event of Default referred to in
Section 8.1, 8.2., 8.3, 8.4, 8.5, 8.6, 8.7, 8.8, 8.9 or 8.10 hereof shall occur
and be continuing, Lender shall have the right, in its discretion, to give
written notice to Borrower, to:
(a) terminate the Commitment and the credits hereby
established, if not theretofore terminated, and, immediately upon such
election, the obligation of Lender to make any further Loan or Loans
and the obligation of Lender to issue any Letter of Credit hereunder
immediately shall be terminated, and/or
(b) accelerate the maturity of all of the Debt (if it be
not already due and payable), whereupon all of the Debt shall become
and thereafter be immediately due and payable in full without any
presentment or demand and without any further or other notice of any
kind, all of which are hereby waived by Borrower.
SECTION 9.2. AUTOMATIC DEFAULTS. If any Event of Default referred to in
Section 8.11 hereof shall occur:
(a) all of the Commitment and the credits hereby
established shall automatically and immediately terminate, if not
theretofore terminated, and Lender thereafter shall not be under any
obligation to grant any further Loan or Loans hereunder, nor shall
Lender be obligated to issue any Letter of Credit hereunder, and
(b) the principal of and interest then outstanding on any
Notes, and all of the Debt, shall thereupon become and thereafter be
immediately due and payable in full (if it be not already due and
payable), all without any presentment, demand or notice of any kind,
which are hereby waived by Borrower.
SECTION 9.3. LETTERS OF CREDIT. If the maturity of the Notes is
accelerated pursuant to Sections 9.1 or 9.2 hereof, Borrower shall immediately
deposit with Lender, as security for Borrower's and any Guarantor of Payment's
obligations to reimburse Lender for any
46
then outstanding Letters of Credit, cash equal to the sum of the aggregate
undrawn balance of any then outstanding Letters of Credit. Lender is hereby
authorized, at its option, to deduct any and all such amounts from any deposit
balances then owing by Lender to or for the credit or account of Borrower and
its Subsidiaries or any thereof, as security for Borrower's and any Guarantor of
Payment's obligations to reimburse Lender for any then outstanding Letters of
Credit.
SECTION 9.4. OFFSETS. If there shall exist any Event of Default
referred to in Section 8.11 hereof or if the maturity of the Notes is
accelerated pursuant to Section 9.1 or 9.2 hereof, Lender shall have the right
at any time to set off against, and to appropriate and apply toward the payment
of, any and all Debt then owing by Borrower to Lender, whether or not the same
shall then have matured, any and all deposit balances and all other indebtedness
then held or owing by Lender or by KeyBank to or for the credit or account of
Borrower, all without notice to or demand upon Borrower or any other Person, all
such notices and demands being hereby expressly waived by Borrower.
SECTION 9.5. COLLATERAL. Upon the occurrence of any Event of Default
and at all times during the continuance thereof, Lender shall have the rights
and remedies of a secured party under the Ohio Revised Code, in addition to the
rights and remedies of a secured party provided elsewhere within this Agreement,
in any other writing executed by Borrower or otherwise provided by law. Lender
may require Borrower to assemble the Collateral, which Borrower agrees to do,
and make it available to Lender at a reasonably convenient place to be
designated by Lender. Lender may, with or without notice to or demand upon
Borrower and with or without the aid of legal process, make use of such force as
may be necessary to enter any premises where the Collateral, or any thereof, may
be found and to take possession thereof (including anything found in or on the
Collateral that is not specifically described in this Agreement, each of which
findings shall be considered to be an accession to and a part of the Collateral)
and for that purpose may pursue the Collateral wherever the same may be found,
without liability for trespass or damage caused thereby to Borrower. After any
delivery or taking of possession of the Collateral, or any thereof, pursuant to
this Agreement, then, with or without resort to Borrower personally or any other
Person or property, all of which Borrower hereby waives, and upon such terms and
in such manner as Lender may deem advisable, Lender, in its discretion, may
sell, assign, transfer and deliver any of the Collateral at any time, or from
time to time. No prior notice need be given to Borrower or to any other Person
in the case of any sale of Collateral which Lender determines to be perishable
or to be declining speedily in value or which is customarily sold in any
recognized market, but in any other case Lender shall give Borrower not fewer
than ten (10) days' prior notice of either the time and place of any public sale
of the Collateral or of the time of any private sale or other intended
disposition thereof is to be made. Borrower waives advertisement of any such
sale and (except to the extent specifically required by the preceding sentence)
waives notice of any kind in respect of any such sale. At any such public sale,
Lender may purchase the Collateral, or any part thereof, free from any right of
redemption, all of which rights Borrower hereby waives and releases. After
deducting all Related Expenses, and after paying all claims, if any, secured by
Liens having precedence over this Agreement, Lender shall apply the net proceeds
of each such sale to or toward the payment of the Debt, whether or not then due,
in such order and by such division as Lender, in its sole discretion, may deem
advisable. Any excess, to the extent permitted by law, shall be paid to
47
Borrower, and Borrower shall remain liable for any deficiency. In addition,
Lender shall at all times have the right to obtain new appraisals of Borrower or
the Collateral, the reasonable cost of which shall be paid by Borrower.
ARTICLE X. MISCELLANEOUS
SECTION 10.1. NO WAIVER; CUMULATIVE REMEDIES; RELATIONSHIP OF PARTIES.
No omission or course of dealing on the part of Lender, KeyBank or the holder of
any Note in exercising any right, power or remedy hereunder or under any of the
Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder or under any of the Loan Documents. The remedies herein provided are
cumulative and in addition to any other rights, powers or privileges held under
any of the Loan Documents or by operation of law, by contract or otherwise.
Nothing contained in this Agreement and no action taken by Lender or KeyBank
pursuant hereto shall be deemed to constitute Borrower and Lender or KeyBank a
partnership, association, joint venture or other entity. The relationship
between (a) Borrower and (b) Lender or KeyBank with respect to the Loan
Documents and the Related Writings is and shall be solely that of debtor and
creditor, respectively, and neither Lender nor KeyBank shall have any fiduciary
obligation toward Borrower with respect to any such documents or the
transactions contemplated thereby.
SECTION 10.2. AMENDMENTS, CONSENTS. No amendment, modification,
termination, or waiver of any provision of any Loan Document nor consent to any
variance therefrom, shall be effective unless the same shall be in writing and
signed by Lender and Borrower and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION 10.3. NOTICES. All notices, requests, demands and other
communications provided for hereunder shall be in writing and, if to Borrower,
mailed or delivered to it, addressed to it at the address specified on the
signature pages of this Agreement, or if to Lender, mailed or delivered to it,
addressed to the address of Lender specified on the signature pages of this
Agreement. All notices, statements, requests, demands and other communications
provided for hereunder shall be deemed to be given or made when delivered or
forty-eight (48) hours after being deposited in the mails with postage prepaid
by registered or certified mail, addressed as aforesaid, or sent by facsimile
with telephonic confirmation of receipt, except that notices from Borrower to
Lender pursuant to any of the provisions hereof shall not be effective until
received by Lender.
SECTION 10.4. COSTS, EXPENSES AND TAXES. Borrower agrees to promptly
pay after demand all reasonable costs and expenses of Lender and KeyBank, and
all Related Expenses, including but not limited to (a) travel and reasonable
out-of-pocket expenses, including but not limited to reasonable attorneys' fees
and expenses, of Lender and KeyBank in connection with the preparation,
negotiation and closing of the Loan Documents, the collection and disbursement
of all funds hereunder and the other instruments and documents to be delivered
hereunder, (b) extraordinary expenses of Lender and KeyBank in connection with
the
48
administration of this Agreement, the Notes and the other instruments and
documents to be delivered hereunder, (c) the reasonable fees and out-of-pocket
expenses of special counsel for Lender and KeyBank, with respect to the
foregoing, and of local counsel, if any, who may be retained by said special
counsel with respect thereto, and (d) all costs and expenses, including
reasonable attorneys' fees, in connection with the restructuring or enforcement
of the Debt, this Agreement or any Related Writing. In addition, Borrower shall
pay any and all stamp and other similar taxes (but not including any tax on the
overall net income or profits of Lender or KeyBank) and fees payable or
determined to be payable in connection with the execution and delivery of any
Loan Document, and the other instruments and documents to be delivered
hereunder, and agrees to hold Lender and KeyBank harmless from and against any
and all liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes or fees.
SECTION 10.5. INDEMNIFICATION. Borrower agrees to defend, indemnify and
hold harmless Lender and KeyBank from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including reasonable attorneys' fees), or disbursements of any kind or
nature whatsoever (but not including any tax on the overall net income or
profits of Lender or KeyBank) which may be imposed on, incurred by or asserted
against Lender or KeyBank in connection with any investigative, administrative
or judicial proceeding (whether or not Lender or KeyBank shall be designated a
party thereto) or any other claim by any Person relating to or arising out of
the Loan Documents or any actual or proposed use of proceeds of the Loans or any
of the Debt, or any activities of any Company or any Obligor or any of their
respective affiliates; provided that neither Lender nor KeyBank shall have the
right to be indemnified under this Section 10.5 for their own gross negligence
or willful misconduct as determined by a court of competent jurisdiction. All
obligations provided for in this Section 10.5 shall survive any termination of
this Agreement.
SECTION 10.6. CAPITAL ADEQUACY. To the extent not covered by Article
III hereof, if Lender shall have determined, after the Closing Date, that the
adoption of any applicable law, rule, regulation or guideline regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central Lender or
comparable agency charged with the interpretation or administration thereof, or
compliance by Lender (or its lending office) with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central Lender or comparable agency, has or would have the effect of
reducing the rate of return on Lender's capital (or the capital of its holding
company) as a consequence of its obligations hereunder to a level below that
which Lender (or its holding company) could have achieved but for such adoption,
change or compliance (taking into consideration Lender's policies or the
policies of its holding company with respect to capital adequacy) by an amount
deemed by Lender to be material, then from time to time, within fifteen (15)
days after demand by Lender, Borrower shall pay to Lender such additional amount
or amounts as will compensate Lender (or its holding company) for such
reduction. Lender shall designate a different lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the judgment of Lender, be otherwise disadvantageous to Lender. A
certificate of Lender claiming compensation under this Section and setting forth
the additional amount or amounts to be paid to it hereunder shall be conclusive
in the absence of manifest error. In determining such amount,
49
Lender may use any reasonable averaging and attribution methods. Failure on the
part of Lender to demand compensation for any reduction in return on capital
with respect to any period shall not constitute a waiver of Lender's rights to
demand compensation for any reduction in return on capital in such period or in
any other period. The protection of this Section shall be available to Lender
regardless of any possible contention of the invalidity or inapplicability of
the law, regulation or other condition which shall have been imposed.
SECTION 10.7. BINDING EFFECT; ASSIGNMENT. This Agreement shall become
effective when it shall have been executed by Borrower and Lender and thereafter
shall be binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns, except that neither Borrower nor Lender shall
have the right to assign its rights hereunder or any interest herein without the
prior written consent of the other (except that if an Event of Default exists,
then the consent of Borrower to an assignment by Lender shall not be required).
No Person, other than Lender, shall have or acquire any obligation to grant
Borrower any Loans.
SECTION 10.8. GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement, each of the Notes and any Related Writing shall be governed by and
construed in accordance with the laws of the State of Ohio and the respective
rights and obligations of Borrower and Lender shall be governed by Ohio law,
without regard to principles of conflict of laws. Borrower hereby irrevocably
submits to the non-exclusive jurisdiction of any Ohio state or federal court
sitting in Cleveland, Ohio, over any action or proceeding arising out of or
relating to this Agreement, the Debt, any Loan Document or any Related Writing,
and Borrower hereby irrevocably agrees that all claims in respect of such action
or proceeding may be heard and determined in such Ohio state or federal court.
Borrower, on behalf of itself and its Subsidiaries, hereby irrevocably waives,
to the fullest extent permitted by law, any objection it may now or hereafter
have to the laying of venue in any action or proceeding in any such court as
well as any right it may now or hereafter have to remove such action or
proceeding, once commenced, to another court on the grounds of FORUM NON
CONVENIENS or otherwise. Borrower agrees that a final, nonappealable judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
SECTION 10.9. SEVERABILITY OF PROVISIONS; CAPTIONS. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. The several captions to sections herein are inserted for
convenience only and shall be ignored in interpreting the provisions of this
Agreement.
SECTION 10.10. ENTIRE AGREEMENT. This Agreement, any Note, any Related
Writing and any other agreement, document or instrument attached hereto or
referred to herein or executed on or as of the Closing Date integrate all the
terms and conditions mentioned herein or incidental hereto and supersede all
oral representations and negotiations and prior writings with respect to the
subject matter hereof.
50
SECTION 10.11. RULE OF CONSTRUCTION. The Loan Documents were negotiated
by the parties with the benefit of legal representation and any rule of
construction or interpretation otherwise requiring this Agreement or any other
Loan Document to be construed or interpreted against any party shall not apply
to any construction or interpretation hereof or thereof.
51
SECTION 10.12. JURY TRIAL WAIVER. BORROWER AND LENDER WAIVE ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, BETWEEN BORROWER AND LENDER, ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED THERETO. THIS WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR
MODIFY LENDER'S ABILITY TO PURSUE REMEDIES PURSUANT TO ANY PROVISION CONTAINED
IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT BETWEEN BORROWER AND
LENDER.
Address: 0000 X.X. 00 Xxxxxxx, #000 AIRCRAFT SERVICE INTERNATIONAL
Xxxxx, Xxxxxxx 00000-0000 GROUP, INC.
Attention: President
By:
Address: Key Center KEY CORPORATE CAPITAL INC.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Structured Finance By:
52
EXHIBIT A
REVOLVING CREDIT NOTE
$10,000,000 New York, New York
April 2, 1998
FOR VALUE RECEIVED, the undersigned, AIRCRAFT SERVICE INTERNATIONAL
GROUP, INC. ("Borrower"), promises to pay, on the last day of the Commitment
Period, as defined in the Credit and Security Agreement (as hereinafter
defined), to the order of KEY CORPORATE CAPITAL INC. ("Lender") at its Main
Office at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000, or at such other place
as Lender shall designate, the principal sum of
TEN MILLION and 00/100 DOLLARS
or the aggregate unpaid principal amount of all Revolving Loans made by Lender
to Borrower pursuant to Section 2.1A of the Credit and Security Agreement,
whichever is less, in lawful money of the United States of America. As used
herein, "Credit and Security Agreement" means the Credit and Security Agreement
dated as of April 2, 1998, between Borrower and Lender, as the same may from
time to time be amended, restated or otherwise modified. Capitalized terms used
herein shall have the meanings ascribed to them in the Credit and Security
Agreement.
Borrower also promises to pay interest on the unpaid principal amount
of each Revolving Loan from time to time outstanding, from the date of such Loan
until the payment in full thereof, at the rates per annum which shall be
determined in accordance with the provisions of Section 2.1A of the Credit and
Security Agreement. Such interest shall be payable on each date provided for in
Section 2.1A; provided, however, that interest on any principal portion which is
not paid when due shall be payable on demand.
The portions of the principal sum hereof from time to time representing
Prime Rate Loans and LIBOR Loans, and payments of principal of any thereof,
shall be shown on the records of Lender by such method as Lender may generally
employ; provided, however, that failure to make any such entry shall in no way
detract from Borrower's obligations under this Note.
If this Note shall not be paid at maturity, whether such maturity
occurs by reason of lapse of time or by operation of any provision for
acceleration of maturity contained in the Credit and Security Agreement, the
principal hereof and the unpaid interest thereon shall bear interest, until
paid, at a rate per annum which shall be the Default Rate. All payments of
principal of and interest on this Note shall be made in immediately available
funds.
This Note is the Revolving Credit Note referred to in the Credit and
Security Agreement. Reference is made to the Credit and Security Agreement for a
description of the right of the
53
undersigned to anticipate payments hereof, the right of the holder hereof to
declare this Note due prior to its stated maturity, and other terms and
conditions upon which this Note is issued.
Except as expressly provided in the Credit and Security Agreement,
Borrower expressly waives presentment, demand, protest and notice of any kind.
JURY TRIAL WAIVER. BORROWER WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN
BORROWER AND LENDER, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THE
CREDIT AND SECURITY AGREEMENT OR THIS NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED THERETO. THIS WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR
MODIFY LENDER'S ABILITY TO PURSUE REMEDIES PURSUANT TO ANY PROVISION CONTAINED
IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT BETWEEN BORROWER AND
LENDER.
AIRCRAFT SERVICE INTERNATIONAL
GROUP, INC.
By:
Title:
Date:_______________________, 19____
54
EXHIBIT B
NOTICE OF LOAN
Key Corporate Capital Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: _________________
Ladies and Gentlemen:
The undersigned, __________________, on behalf of AIRCRAFT SERVICE
INTERNATIONAL GROUP, INC. ("Borrower") refers to the Credit and Security
Agreement, dated as of April 2, 1998 ("Credit and Security Agreement", the terms
defined therein being used herein as therein defined), between Borrower and Key
Corporate Capital Inc., and hereby gives you notice, pursuant to Section 2.2 of
the Credit and Security Agreement that Borrower hereby requests a Loan under the
Credit and Security Agreement, and in connection therewith sets forth below the
information relating to the Loan (the "Proposed Loan") as required by Section
2.2 of the Credit and Security Agreement:
(a) The Business Day of the Proposed Loan is __________,
19__.
(b) The amount of the Proposed Loan is $_______________
(c) The Proposed Loan is to be a Prime Rate Loan ____
/LIBOR Loan ___. (Check one.)
(d) If the Proposed Loan is a LIBOR Loan, the Interest
Period requested is one month ___, two months ___, three months ___,
six months ___. (Check one.)
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Loan:
(i) the representations and warranties contained in each
Loan Document are correct in all material respects, before and after
giving effect to the Proposed Loan and the application of the proceeds
therefrom, as though made on and as of such date except to the extent
that such representations or warranties relate to an earlier date;
(ii) no event has occurred and is continuing, or would
result from such Proposed Loan, or the application of proceeds
therefrom, which constitutes an Unmatured Event of Default or Event of
Default; and
55
(iii) the conditions set forth in Section 2.2 of the Credit
and Security Agreement have been satisfied.
Very truly yours,
AIRCRAFT SERVICE INTERNATIONAL
GROUP, INC.
By:
Name:
Title:
56
EXHIBIT C
COMPLIANCE CERTIFICATE
For Fiscal Quarter ended _______________
THE UNDERSIGNED HEREBY CERTIFY THAT:
(1) I am the duly elected President or Chief Financial Officer of
AIRCRAFT SERVICE INTERNATIONAL GROUP, INC., a Delaware corporation ("Borrower");
(2) I am familiar with the terms of that certain Credit and
Security Agreement dated as of April 2, 1998, between Borrower and Key Corporate
Capital Inc. ("Lender") (as the same may from time to time be amended, restated
or otherwise modified, the "Credit Agreement", the terms defined therein and not
otherwise defined in this Certificate being used herein as therein defined), and
the terms of the other Loan Documents, and we have made, or have caused to be
made under our supervision, a review in reasonable detail of the transactions
and condition of Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;
(3) The review described in paragraph (2) above did not disclose,
and I have no knowledge of, the existence of any condition or event which
constitutes or constituted an Unmatured Event of Default or Event of Default, at
the end of the accounting period covered by the attached financial statements or
as of the date of this Certificate, or, to the extent I am aware, the nature of
such Event of Default; and
(4) Set forth on Attachment I hereto are calculations of the
financial covenants set forth in Sections 5.7 of the Credit Agreement, which
calculations show compliance with the terms thereof or, to the extent I am
aware, the nature of such Event of Default.
IN WITNESS WHEREOF, I have signed this certificate the ___ day of
_________, 19___.
AIRCRAFT SERVICE INTERNATIONAL
GROUP, INC.
By:
Title:
57
CREDIT AND SECURITY AGREEMENT
FIRST AMENDMENT AGREEMENT
This First Amendment Agreement is made as of the ___ day of May, 1999,
by and between AIRCRAFT SERVICE INTERNATIONAL GROUP, INC., a Delaware
corporation ("Borrower"), and KEY CORPORATE CAPITAL INC. ("Lender").
WHEREAS, Borrower and Lender are parties to a certain Credit and
Security Agreement dated as of April 2, 1998, as it may from time to time be
amended, restated or otherwise modified, which provides, among other things, for
a Revolving Loan facility, upon certain terms and conditions (the "Credit and
Security Agreement");
WHEREAS, Borrower and Lender desire to amend the Credit and Security
Agreement to add a Term Loan facility and to modify certain other provisions
thereof; and
WHEREAS, each term used herein shall be defined in accordance with the
Credit and Security Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein and for other valuable considerations, Borrower and Lender
agree as follows:
1. Article I of the Credit and Security Agreement is hereby
amended to delete the definitions of "Applicable Margin", "Borrowing Base",
"Commitment", "Loan", "Note", "Proceeds", "Proviso", and "Related Expenses" in
their entirety and to insert in place thereof the following:
"Applicable Margin" shall mean :
(a) for the period from the Closing Date through the fiscal
quarter ending June 30, 1999, (i) for Revolving Loans, one hundred
seventy-five (175) basis points for LIBOR Loans and zero (0) basis
points for Prime Rate Loans, and (ii) for the Term Loan, two hundred
fifty (250) basis points for LIBOR Loans and seventy-five (75) basis
points for Prime Rate Loans;
(b) commencing on July 1, 1999 and initially based upon
financial statements for the fiscal quarter ended March 31, 1999, the
number of basis points (depending upon whether Loans are LIBOR Loans or
Prime Rate Loans) set forth in the following matrix, based on the
result of the computation of the Leverage Ratio for the most recently
completed fiscal quarter, shall be used to establish the
[SIGNATURE PAGE]
58
number of basis points that will go into effect on July 1, 1999 and
thereafter:
------------------------------------------------------------------------------------------------------------
APPLICABLE APPLICABLE APPLICABLE APPLICABLE
LEVERAGE RATIO BASIS POINTS BASIS POINTS BASIS POINTS BASIS POINTS
FOR REVOLVING FOR TERM FOR REVOLVING FOR TERM
LOANS LIBOR LOAN LIBOR LOANS PRIME LOAN PRIME
LOANS LOANS RATE LOANS RATE LOANS
------------------------------------------------------------------------------------------------------------
Greater than or equal 225 300 50 125
to 6.00 to 1.00
------------------------------------------------------------------------------------------------------------
Greater than or equal 200 275 25 100
to 5.50 to 1.00 but less
than 6.00 to 1.00
------------------------------------------------------------------------------------------------------------
Greater than or equal 175 250 0 75
to 5.00 to 1.00 but less
than 5.50 to 1.00
------------------------------------------------------------------------------------------------------------
Greater than or equal 150 225 0 50
to 4.50 to 1.00 but less
than 5.00 to 1.00
------------------------------------------------------------------------------------------------------------
Less than 4.50 to 1.00 125 200 0 0
------------------------------------------------------------------------------------------------------------
Changes to the Applicable Margin shall be effective on the
first day of each fiscal quarter following the date upon which Lender
received, or, if earlier, Lender should have received, pursuant to
Section 5.3(a) hereof, the financial statements of the Companies for
Borrower's fiscal quarters. The above matrix does not modify or waive,
in any respect, the requirements of Section 5.7 hereof, the rights of
Lender to charge the Default Rate, or the rights and remedies of Lender
pursuant to Articles VIII and IX hereof.
"Borrowing Base" shall mean an amount not in excess of the sum
of (a) (i) eighty-five percent (85%) of the amount due and owing on
Eligible Accounts Receivable and (ii) zero percent (0%) on Inventory
minus (b) the Elsinore Seller Note Reserve; provided notwithstanding
anything herein to the contrary, Lender shall at all times have the
right to modify or reduce the percentages from time to time, in its
reasonable discretion.
"Commitment" shall mean the obligation hereunder of Lender to
make Loans, and to issue Letters of Credit, pursuant to the Revolving
Credit Commitment and Term Loan Commitment, up to an aggregate
principal amount outstanding at any one time of Fifteen Million Dollars
($15,000,000), or such lesser amount as shall be determined pursuant to
Section 2.5 hereof.
"Loan" or "Loans" shall mean the credit granted to Borrower in
accordance with Section 2.1A and Section 2.1C hereof.
[SIGNATURE PAGE]
59
"Note" or "Notes" shall mean the Revolving Credit Note, Term
Note or any other note delivered pursuant to this Agreement.
"Proceeds" shall mean (a) any proceeds, and (b) whatever is
received upon the sale, exchange, collection, or other disposition of
Collateral, Term Loan Collateral or proceeds, whether cash or non-cash.
Cash proceeds includes, without limitation, moneys, checks, and Deposit
Accounts. Proceeds includes, without limitation, any Account arising
when the right to payment is earned under a contract right, any
insurance payable by reason of loss or damage to the Collateral or Term
Loan Collateral, and any return or unearned premium upon any
cancellation of insurance. Except as expressly authorized in this
Agreement, Lender's right to Proceeds specifically set forth herein or
indicated in any financing statement shall never constitute an express
or implied authorization on the part of Lender to Borrower's sale,
exchange, collection, or other disposition of any or all of the
Collateral or Term Loan Collateral.
"Proviso" shall mean that for Borrower's fiscal quarters
ending prior to the fiscal quarter ending March 31, 2000, Consolidated
EBITDA, as referred to in Section 5.7(b) hereof, shall be calculated as
follows: (a) for the fiscal quarter ending June 30, 1999, Consolidated
EBITDA shall be annualized by multiplying the Consolidated EBITDA for
that fiscal quarter by four (4); (b) for the fiscal quarter ending
September 30, 1999, Consolidated EBITDA shall be annualized by
multiplying the Consolidated EBITDA for that fiscal quarter and the
previous fiscal quarter by two (2); and (c) for the fiscal quarter
ending December 31, 1999, Consolidated EBITDA shall be annualized by
multiplying the Consolidated EBITDA for that fiscal quarter and the two
(2) previous fiscal quarters by one and one-third (1 1/3).
"Related Expenses" shall mean any and all costs, liabilities,
and expenses (including, without limitation, losses, damages,
penalties, claims, actions, reasonable attorneys' fees, legal expenses,
judgments, suits, and disbursements) incurred by, imposed upon, or
asserted against, Lender in any attempt by Lender: (a) to obtain,
preserve, perfect, or enforce any security interest evidenced by this
Agreement or any Related Writing; (b) to obtain payment, performance,
and observance of any and all of the Debt; (c) to maintain, insure,
audit, collect, preserve, repossess, and dispose of any of the
Collateral, Term Loan Collateral or any thereof, including, without
limitation, costs and expenses for appraisals, assessments, and audits
of Borrower or any such Collateral or Term Loan Collateral; or (d)
incidental or related to (a) through (c) above, including, without
limitation, interest thereupon from the date incurred, imposed, or
asserted until paid at the Default Rate.
2. Article I of the Credit and Security Agreement is hereby
amended to add the following new definitions thereto:
"EAC" shall mean the Elsinore Acquisition Corporation.
[SIGNATURE PAGE]
60
"Elsinore Acquisition" shall mean the acquisition of the
assets of Elsinore L.P. ("Elsinore"), pursuant to the Elsinore Asset
Purchase Agreement.
"Elsinore Acquisition Documents" shall mean the Elsinore Asset
Purchase Agreement and the following documents as defined in the
Elsinore Asset Purchase Agreement: The Ranger/ASIG Guaranty, the Parent
Guaranty, the Lyon Guaranty and the Purchaser Note.
"Elsinore Asset Purchase Agreement" shall mean the Asset
Purchase Agreement among Borrower, Ranger Aerospace, EAC, Elsinore,
Air/Lyon, Inc., Air/Lyon Associates, L.P., Elsinore Aerospace Services,
L.P., Elsinore Services Corporation and General Xxxxxxx Xxxx providing
for the purchase of substantially all of the assets of, and the
assumption of certain liabilities of Elsinore by EAC.
"Elsinore Assets" shall mean the assets acquired by Borrower
pursuant to the Elsinore Acquisition.
"Elsinore Seller Note" shall mean the Purchaser Note as
defined in the Elsinore Asset Purchase Agreement.
"Elsinore Seller Note Reserve" shall mean an amount determined
by Lender, in its sole discretion, as a reserve against collateral
values, not to exceed an amount equal to the outstanding balance of the
Elsinore Seller Note, including all principal, interest and related
costs and charges in connection with the Elsinore Seller Note.
"Equipment" shall mean (a) all equipment as defined in Chapter
1309 of the Ohio Revised Code, including without limitation, machinery,
motor vehicles, trade fixtures, office and other furniture and
furnishings, tools, dies, jigs, and molds; and (b) all substitutes or
replacements for, and all parts, accessories, additions, attachments,
or accessions to (a) above.
"Term Loan" shall mean the term loan granted to Borrower by
Lender in accordance with Section 2.1C hereof.
"Term Loan Cash Collateral Account" shall mean a commercial
Deposit Account designated "term loan cash collateral account" and
maintained by Borrower with KeyBank, without liability by KeyBank or
Lender to pay interest thereon, from which account Lender shall have
the exclusive right to withdraw funds until all of the Debt is paid in
full.
"Term Loan Cash Security" shall mean all cash, instruments,
Deposit Accounts, and other cash equivalents, whether matured or
unmatured, whether collected or in the process of collection, upon
which Borrower presently has or may hereafter have any claim, wherever
located, including but not limited to any of the foregoing that are
presently or may hereafter be existing or maintained with, issued by,
drawn upon, or in
[SIGNATURE PAGE]
61
the possession of KeyBank or Lender, in each case only to the extent
relating to the Term Loan Collateral.
"Term Loan Commitment" shall mean the obligation hereunder of
Lender to make the Term Loan in the original principal amount of Five
Million Dollars ($5,000,000).
"Term Loan Collateral" shall mean (a) all of Borrower's
Equipment, whether now owned or hereafter acquired by Borrower; (b) all
funds now or hereafter on deposit in the Term Loan Cash Collateral
Account, if any; (c) all of Borrower's existing and future Term Loan
Cash Security; and (d) all of the Proceeds, products, profits, and
rents of any of (a) through (c) above, in each case to the extent set
forth in the applicable Loan Documents. The definition of Term Loan
Collateral shall exclude any items which are not assignable pursuant to
the terms of any agreement or require the consent of any other party or
are prohibited by law.
"Term Note" shall mean any Term Note executed and delivered
pursuant to Section 2.1C hereof.
3. Article I of the Credit and Security Agreement is hereby
amended to delete the definitions of "Maintenance Capital Expenditures" and
"Consolidated Interest Expense" in their entirety.
4. The Credit and Security Agreement is hereby amended to delete
the first and second paragraphs in Section 2.1 therefrom, with the following
being inserted in place thereof:
SECTION 2.1. AMOUNT AND NATURE OF CREDIT. Subject to the terms
and conditions of this Agreement, Lender shall make Loans to Borrower,
and Lender shall, or shall cause KeyBank to, issue Letters of Credit at
the request of Borrower, in such aggregate amount as Borrower shall
request pursuant to the Revolving Credit Commitment and Term Loan
Commitment; provided, however, that in no event shall the aggregate
principal amount of all Loans and Letters of Credit outstanding under
this Agreement be in excess of the Commitment.
The Loans may be made as Revolving Loans and a Term Loan, and
Letters of Credit may be issued, as follows:
5. Section 2.1 of the Credit and Security Agreement is hereby
amended to add the following new Subsection 2.1(C)thereto:
C. Term Loan.
Subject to the terms and conditions of this Agreement, Lender
shall make a Term Loan to Borrower in such amount, if any, as Borrower
may request on May ___, 1999, but not exceeding the Term Loan
Commitment. To evidence the
[SIGNATURE PAGE]
62
Term Loan, Borrower shall execute and deliver to Lender a Term Note,
dated the date of this First Amendment Agreement, and in the form of
Exhibit A-1 hereto. The Term Loan shall be payable in twenty-three (23)
consecutive quarter-annual installments, commencing August 1, 1999 and
continuing on the first day of each succeeding November, February, May
and August thereafter as follows: (i) for the period from August 1,
1999 through May 1, 2001, One Hundred Twenty-Five Thousand Dollars
($125,000), (ii) for the period from August 1, 2001 through May 1,
2003, One Hundred Eighty-Seven Thousand Five Hundred Dollars
($187,500), (iii) for the period from August 1, 2003 through May 1,
2004, Two Hundred Seventy-Five Thousand Dollars ($275,000), and (iv)
for the period from August 1, 2004 through February 1, 2005, Three
Hundred Fifty Thousand Dollars ($350,000), with the balance thereof
payable in full on May 1, 2005. Borrower shall notify Lender at the
time of the request whether the Term Loan will be a Prime Rate Loan or
a LIBOR Loan. The Term Loan may be a mixture of a Prime Rate Loan and
LIBOR Loans. Lender, at the request of Borrower, subject to the
applicable notice and other provisions of Section 2.2 hereof, may
convert a Prime Rate Loan to a LIBOR Loan at any time and may convert a
LIBOR Loan to a Prime Rate Loan on any Interest Adjustment Date.
If the Term Loan is a Prime Rate Loan, Borrower shall pay
interest on the unpaid principal amount thereof outstanding from time
to time from the date thereof until paid, commencing August 1, 1999,
and continuing on the first day of each succeeding November, February,
May and August of each year and at the maturity thereof, at the Derived
Prime Rate from time to time in effect.
If the Term Loan is a LIBOR Loan, Borrower shall pay interest
on the unpaid principal amount of each LIBOR Loan outstanding from time
to time from the date thereof until paid, fixed in advance for each
Interest Period (but subject to changes in the Applicable Margin) as
herein provided for each such Interest Period. Interest on such LIBOR
Loans shall be at the Derived LIBOR Rate, payable on each Interest
Adjustment Date with respect to an Interest Period (provided that if an
Interest Period exceeds three (3) months, the interest must be paid
every three (3) months, commencing three (3) months from the beginning
of such Interest Period).
6. Section 2.4 of the Credit and Security Agreement is hereby
amended to add the following third paragraph to the end of Section 2.4 thereto:
Each prepayment of the Term Loan shall be applied to the
principal installments thereof in the inverse order of their respective
maturities.
7. The Credit and Security Agreement is hereby amended by
deleting Section 2.5 in its entirety, with the following being inserted in place
thereof:
(a) Borrower agrees to pay to Lender, as consideration
for its Revolving Credit Commitment hereunder, a commitment fee from
the Closing
[SIGNATURE PAGE]
63
Date to and including the last day of the Commitment Period, equal to
(i) one-half of one percent (1/2%) per annum, times (ii) (A) the
Revolving Credit Commitment less (B) the average daily outstanding
principal amount of the Revolving Loans, less (C) the average daily
amount of all issued and outstanding Letters of Credit. The commitment
fee shall be payable monthly, in arrears, on May 1, 1998 and on the
first day of each month thereafter and on the last day of the
Commitment Period.
(b) Borrower shall pay to Lender an account
administration fee in the amount of Ten Thousand Dollars ($10,000) per
year, payable on the Closing Date and each anniversary date thereof,
during the Commitment Period.
(c) Borrower may at any time or from time to time
terminate in part the Revolving Credit Commitment to an amount not less
than the aggregate principal amount of the Revolving Loans and Letters
of Credit then outstanding, by giving Lender not fewer than five (5)
Business Days' notice, provided that any such partial termination shall
be in an amount of One Million Dollars ($1,000,000) or any integral
multiple thereof; and further provided, that no partial termination
shall occur, without Lender's written consent, if any portion of the
Term Loan, including all principal and interest, is then outstanding.
Each partial termination shall require the payment of a fee to Lender
in an amount equal to the amount of such partial termination,
multiplied by one-half of one percent (1/2%). After each such partial
termination, the commitment fees payable hereunder shall be calculated
upon the Revolving Credit Commitment as so reduced. Any partial
reduction in the Revolving Credit Commitment shall be effective during
the remainder of the Commitment Period.
(d) Borrower may at any time terminate in whole the
Revolving Credit Commitment by (i) giving Lender no fewer than five (5)
Business Days' notice, and (ii) payment of the Termination Fee;
provided, that no termination shall occur, without Lender's written
consent, if any portion of the Term Loan, including all principal and
interest, is outstanding. On the effective date of such termination
(Borrower having prepaid in full the unpaid principal balance (if any)
of the Revolving Credit Notes outstanding, together with all interest
(if any) and commitment and other fees accrued and unpaid and provided
that no issued and outstanding Letters of Credit shall exist), after
payment of the Termination Fee, Lender shall xxxx all of the Revolving
Credit Notes outstanding "Canceled" and deliver such Revolving Credit
Notes to Borrower.
8. The Credit and Security Agreement is hereby amended by
inserting the following new Subsection 2.7(c):
(c) In the event that the Revolving Credit Commitment is
terminated, Borrower shall immediately prepay to Lender the outstanding
balance of the Term Loan, including all principal and interest.
[SIGNATURE PAGE]
64
9. The Credit and Security Agreement is hereby amended by
deleting Section 5.1 in its entirety, with the following being inserted in place
thereof:
SECTION 5.1. INSURANCE. Each Company shall at all times
maintain insurance upon its Inventory, Equipment and other personal and
real property in such amounts, for such period, and against such risks
as is adequate for the conduct of its business and value of its
properties, as reasonably determined by Borrower, with provisions
satisfactory to Lender for payment of all losses on Collateral and Term
Loan Collateral thereunder to Lender and such Company as their
interests may appear (loss payable endorsement in favor of Lender). Any
such policies of insurance shall provide for no fewer than thirty (30)
days prior written notice of cancellation to Lender. Any sums received
by Lender in payment of insurance losses, returns, or unearned premiums
under the policies covering the Collateral or Term Loan Collateral
shall, during the continuance of an Event of Default, be applied upon
any Debt whether or not the same is then due and payable, and at all
other times shall be delivered to Borrower for the purpose of
replacing, repairing, or restoring the insured property. Lender is
hereby authorized to act as attorney-in-fact for Borrower in obtaining,
adjusting, settling and canceling such insurance and indorsing any
drafts. In the event of failure to provide such insurance as herein
provided, Lender may, at its option, provide such insurance and
Borrower shall pay to Lender, upon demand, the cost thereof. Should
Borrower fail to pay such sum to Lender upon demand, interest shall
accrue thereon, from the date of demand until paid in full, at the
Default Rate. Within ten (10) days of Lender's written request,
Borrower shall furnish to Lender such information about Borrower's
insurance as Lender may from time to time reasonably request, which
information shall be prepared in form and detail satisfactory to Lender
and certified by a Financial Officer of Borrower.
10. The Credit and Security Agreement is hereby amended by
deleting Section 5.7 in its entirety, with the following being inserted in place
thereof:
(a) MINIMUM EBITDA. Borrower shall not suffer or permit
Consolidated EBITDA at the end of the applicable period to be less than
the following: (A) (i) for the period from April 1, 1999 through June
30, 1999, Three Million Two Hundred Thousand Dollars ($3,200,000); (ii)
for the period from April 1, 1999 through September 30, 1999, Six
Million Eight Hundred Thousand Dollars ($6,800,000); (iii) for the
period from April 1, 1999 through December 31, 1999, Ten Million Six
Hundred Thousand Dollars ($10,600,000), based upon the financial
statements of Borrower for the applicable fiscal quarters; and (B) for
the fiscal quarter ending March 31, 2000, and thereafter, Fourteen
Million Six Hundred Thousand Dollars ($14,600,000), based upon the
financial statements of Borrower for the most recently completed fiscal
quarter and the three (3) previous fiscal quarters (on a rolling four
(4) quarter basis).
(b) LEVERAGE. Borrower shall not suffer or permit the
Leverage Ratio to exceed (i) 7.00 to 1.00 on June 30, 1999; (ii) 6.75
to 1.00 on September
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65
30, 1999; (iii) 6.50 to 1.00 on December 31, 1999; and 6.25 to 1.00 on
March 31, 2000 and thereafter, based upon the financial statements of
Borrower for the most recently completed fiscal quarter and the three
(3) previous fiscal quarters (on a rolling four (4) quarter basis),
subject to the Proviso.
11. The Credit and Security Agreement is hereby amended by
inserting the following new Subsection 5.9(xx):
(xx) Liens securing Indebtedness or other obligations incurred
in connection with the Elsinore Acquisition in an aggregate amount not
to exceed One Hundred Thousand Dollars ($100,000).
12. The Credit and Security Agreement is hereby amended by
deleting the first sentence in Section 5.12 in its entirety, with the following
being inserted in place thereof:
No Company shall merge or consolidate with any other Person, or sell,
lease or transfer or otherwise dispose of any Collateral, Term Loan
Collateral or all or substantially all of its assets (as an entirety or
substantially as an entirety in one transaction or a series of related
transactions) to any Person other than in the ordinary course of
business, except that if no Unmatured Event of Default or Event of
Default shall then exist or immediately thereafter shall begin to
exist:
13. The Credit and Security Agreement is hereby amended by
inserting the following sentence at the end of Section 5.13:
Notwithstanding anything to the contrary contained in this
Section 5.13, Lender acknowledges and consents to the Elsinore
Acquisition.
14. The Credit and Security Agreement is hereby amended by
deleting Section 5.18 in its entirety, with the following being inserted in
place thereof:
SECTION 5.18. CORPORATE NAMES AND LOCATION OF COLLATERAL
OR TERM LOAN COLLATERAL. No Obligor shall change its corporate name,
unless, in each case, such Obligor shall provide Lender with at least
thirty (30) days prior written notice thereof. No Obligor shall use
trade names, assumed names or fictitious names without giving Lender at
least thirty (30) days prior written notice thereof. Borrower shall
also provide Lender with at least thirty (30) days prior written
notification: (a) upon any material portion of an Obligor's Inventory
or Equipment being maintained or to be to be maintained at a location
other than those listed in Schedule 7.5; (b) of any change in the
location of the office where any Obligor's records pertaining to its
Accounts are kept; (c) of the location of any new places of business
and the changing or closing of any of its existing places of business;
and (d) of any change in any Obligor's chief executive office. In the
event of any of the foregoing, Borrower shall promptly execute and
deliver to Lender (and Borrower agrees that Lender may execute and
deliver the same as Borrower's irrevocable attorney-in-fact) new U.C.C.
financing
[SIGNATURE PAGE]
66
statements describing the Collateral and/or Term Loan Collateral and
otherwise in form and substance sufficient for recordation wherever
necessary or appropriate, as determined in Lender's sole discretion, to
perfect or to continue the perfection of Lender's security interest in
the Collateral and/or Term Loan Collateral, based upon such new places
of business or names, and Borrower shall pay all filing and recording
fees and taxes in connection with the filing or recordation of such
financing statements and shall immediately reimburse Lender therefor if
Lender pays the same. Such amounts shall be Related Expenses hereunder.
15. The Credit and Security Agreement is hereby amended by
deleting Section 5.20 in its entirety, with the following being inserted in
place thereof:
SECTION 5.20. SUBSIDIARY GUARANTIES. Each United States
domestic Subsidiary of a Company created, acquired or held subsequent
to the Closing Date, shall immediately execute and deliver to Lender a
Guaranty of Payment of all of the Debt, and, if requested by Lender, a
security agreement covering all Collateral and Term Loan Collateral of
such Guarantor, as security for the Debt, such agreements to be in form
and substance substantially similar to the existing Loan Documents,
along with such corporate governance and authorization documents and an
opinion of counsel as may be deemed necessary or advisable by Lender.
16. The Credit and Security Agreement is hereby amended by
deleting Section 5.21 in its entirety, with the following being inserted in
place thereof:
SECTION 5.21. COLLATERAL; TERM LOAN COLLATERAL. Borrower
shall:
(a) at all reasonable times (during normal business hours and
with reasonable advance notice) allow Lender by or through any of its
officers, agents, employees, attorneys, or accountants to (i) examine,
inspect, and make extracts from Borrower's books and other records,
including, without limitation, the tax returns of Borrower; (ii)
arrange for verification of Borrower's Accounts, under reasonable
procedures, directly with Account Debtors or by other methods after
consultation with Borrower; and (iii) examine, inspect or perform
audits or appraisals of Borrower's Collateral and/or Term Loan
Collateral, wherever located; provided so long as no Unmatured Event of
Default or Event of Default then exists, Lender shall be limited to two
(2) audits or appraisals of the Term Loan Collateral in any calender
year;
(b) promptly furnish to Lender upon request (i) additional
statements and information with respect to the Collateral and/or Term
Loan Collateral, and all writings and information relating to or
evidencing any of Borrower's Accounts (including, without limitation,
computer printouts or typewritten reports listing the mailing addresses
of all present Account Debtors), and (ii) any other writings and
information as Lender may request;
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67
(c) notify Lender in writing promptly upon the creation of any
material amount of Accounts with respect to which the Account Debtor is
the United States of America or any state, city, county or other
governmental authority or any department, agency or instrumentality of
any of them, or any foreign government or instrumentality thereof or
any business which is located in a foreign country;
(d) at the request of Lender, xxxx its books and records of
Accounts to indicate the security interest granted to Lender hereunder;
(e) promptly notify Lender in writing of any information which
Borrower has or may receive with respect to the Collateral or Term Loan
Collateral which might in any manner materially and adversely affect
the value thereof or the rights of Lender with respect thereto;
(f) maintain the Equipment in operating condition and repair,
ordinary wear and tear and damage by casualty (provided such casualty
is covered by insurance pursuant to Section 5.1 hereof) excepted,
making all necessary replacements thereof so that the value and
operating efficiency thereof shall at all times be maintained and
preserved, and promptly inform Lender of any additions to or deletions
from the Equipment other than in the ordinary course; and
(g) upon request of Lender, promptly take such action and
promptly make, execute, and deliver all such additional and further
items, deeds, assurances, and instruments as Lender may require,
including, without limitation, financing statements, so as to
completely vest in and ensure to Lender its rights hereunder and in or
to the Collateral and/or Term Loan Collateral.
A carbon, photographic, or other reproduction of this
Agreement may, at the option of Lender, be used as a financing
statement. If certificates of title or applications for title are
issued or outstanding with respect to any of Borrower's Inventory or
Equipment, upon Lender's request, Borrower shall deliver such
certificate or application to Lender and cause the interest of Lender
to be properly noted thereon. Borrower hereby authorizes Lender or
Lender's designated agent (but without obligation by Lender to do so)
to incur Related Expenses (whether prior to, upon, or subsequent to any
Unmatured Event of Default or Event of Default), and Borrower shall
promptly repay, reimburse, and indemnify Lender for any and all Related
Expenses. If Borrower fails to keep and maintain an item of Equipment
which is necessary to the business of Borrower in operating condition,
Lender may (but shall not be required to) so maintain or repair all or
any part of such Equipment and the cost thereof shall be a Related
Expense. All Related Expenses are payable to Lender upon demand
therefor; Lender may, at its option, debit Related Expenses directly to
the Revolving Credit Note.
17. The Credit and Security Agreement is hereby amended by
deleting Section 6.1 in its entirety, with the following being inserted in place
thereof:
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68
SECTION 6.1. SECURITY INTEREST IN COLLATERAL OR TERM LOAN
COLLATERAL.
(a) In consideration of and as security for the full and
complete payment of all of the Debt (except for any portion of the Debt
incurred in connection with the Term Loan), Borrower does hereby grant
to Lender a security interest in and an assignment of the Collateral.
(b) In consideration of and as security for the full and
complete payment of all of the Debt (except for any portion of the Debt
incurred in connection with the Revolving Loans or Letters of Credit),
Borrower does hereby grant to Lender a security interest in and an
assignment of the Term Loan Collateral.
18. The Credit and Security Agreement is hereby amended by
deleting the first paragraph of Section 6.2 in its entirety, with the following
being inserted in place thereof:
SECTION 6.2. COLLECTIONS AND RECEIPT OF PROCEEDS BY
BORROWER. During the continuance of an Event of Default and upon
written notice to Borrower from Lender, (a) a Cash Collateral Account
shall be opened by Borrower at the main office of Lender and all such
lawful collections of Borrower's Accounts and such Proceeds of
Borrower's Accounts and Inventory shall be remitted daily by Borrower
to Lender in the form in which they are received by Borrower, either by
mailing or by delivering such collections and Proceeds to Lender,
appropriately endorsed for deposit in the Cash Collateral Account and
(b) a Term Loan Cash Collateral Account shall be opened by Borrower at
the main office of Lender and such Proceeds of Borrower's Term Loan
Collateral shall be remitted daily by Borrower to Lender in the form in
which they are received by Borrower, either by mailing or by delivering
such Proceeds to Lender, appropriately endorsed for deposit in the Term
Loan Cash Collateral Account. In the event that such notice is given to
Borrower from Lender, during the continuance of an Event of Default,
Borrower shall not commingle such collections or Proceeds with any of
Borrower's other funds or property, but shall hold such collections and
Proceeds separate and apart therefrom upon an express trust for Lender.
In such case, Lender may, in its sole discretion, at any time and from
time to time during the continuance of an Event of Default, apply all
or any portion of (i) the account balance in the Cash Collateral
Account as a credit against (A) the outstanding principal or interest
of any Revolving Credit Note or Revolving Credit Notes, or (B) any
other Debt (except for any portion of the Debt incurred in connection
with the Term Loan), or (ii) the account balance in the Term Loan Cash
Collateral Account as a credit against (A) the outstanding principal or
interest of any Term Note or Term Notes, or (B) any other Debt (except
for any portion of the Debt incurred in connection with the Revolving
Loans or Letters of Credit) If any remittance shall be dishonored, or
if, upon final payment, any claim with respect thereto shall be
[SIGNATURE PAGE]
69
made against Lender on its warranties of collection, Lender may charge
the amount of such item against the Cash Collateral Account, the Term
Loan Cash Collateral Account or any other Deposit Account maintained by
Borrower with Lender, and, in any event, retain the same and Borrower's
interest therein as additional security for the Debt. Lender may, in
its sole discretion, at any time and from time to time during the
continuance of an Event of Default, release funds from the Cash
Collateral Account or Term Loan Cash Collateral Account to Borrower for
use in Borrower's business and Lender shall release such funds to
Borrower at all times when no Event of Default shall exist. The balance
in the Cash Collateral Account or Term Loan Cash Collateral Account may
be withdrawn by Borrower upon termination of this Agreement and payment
in full of all of the Debt or at any time that no Event of Default is
in existence. At Lender's request, during the continuance of an Event
of Default, Borrower shall cause all remittances representing
collections and Proceeds of Collateral and/or Term Loan Collateral to
be mailed to a lock box to which Lender shall have access for the
processing of such items in accordance with the provisions, terms, and
conditions of Lender's customary lock box agreement. The provisions of
this Section 6.2 shall only apply during the continuance of any Event
of Default.
19. The Credit and Security Agreement is hereby amended by
deleting Section 6.3 in its entirety, with the following being inserted in place
thereof:
SECTION 6.3. COLLECTIONS AND RECEIPT OF PROCEEDS BY
LENDER. Borrower hereby constitutes and appoints Lender, or Lender's
designated agent, as Borrower's attorney-in-fact to exercise, at any
time during the continuance of an Event of Default, all or any of the
following powers which, being coupled with an interest, shall be
irrevocable until the complete and full payment of all of the Debt:
(a) to receive, retain, acquire, take, endorse, assign,
deliver, accept, and deposit, in Lender's name or Borrower's name, any
and all of Borrower's cash, instruments, chattel paper, documents,
Proceeds of Accounts, Proceeds of Inventory, collection of Accounts,
and any other writings in each case to the extent relating to any of
the Collateral or Term Loan Collateral;
(b) to transmit to Account Debtors, on any or all of
Borrower's Accounts, notice of assignment to Lender thereof and
Lender's security interest therein and to request from such Account
Debtors at any time, in Lender's name or in Borrower's name,
information concerning Borrower's Accounts and the amounts owing
thereon;
(c) to transmit to purchasers of any or all of Borrower's
Inventory, notice of Lender's security interest therein, and to request
from such purchasers at any time, in Lender's name or in Borrower's
name, information concerning Borrower's Inventory and the amounts owing
thereon by such purchasers;
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70
(d) to notify and require Account Debtors on Borrower's
Accounts and purchasers of Borrower's Inventory to make payment of
their indebtedness directly to Lender;
(e) to take or bring, in Lender's name or Borrower's
name, all steps, actions, suits, or proceedings deemed by Lender
necessary or desirable to effect the receipt, enforcement, and
collection of the Collateral and Term Loan Collateral; and
(f) to accept all collections in any form relating to (i)
the Collateral, including remittances which may reflect deductions, and
to deposit the same, into Borrower's Cash Collateral Account or, at the
option of Lender, to apply them as a payment against any Revolving
Credit Note or Revolving Credit Notes or any other Debt (except for any
portion of the Debt incurred in connection with the Term Loan), or (ii)
the Term Loan Collateral, including remittances which may reflect
deductions, and to deposit the same, into Borrower's Term Loan Cash
Collateral Account or, at the option of Lender, to apply them as a
payment against any Term Note or Term Notes or any other Debt (except
for any portion of the Debt incurred in connection with the Revolving
Loans or Letters of Credit).
20. Section 7.5 of the Credit and Security agreement is hereby
amended by deleting the last sentence in Section 7.5 in its entirety, with the
following being inserted in place thereof:
As of the date hereof, the Companies have places of business or
maintain their Inventory or Equipment at the locations set forth on
Schedule 7.5.
21. The Credit and Security Agreement is hereby amended by
deleting Section 7.7 in its entirety, with the following being inserted in place
thereof:
SECTION 7.7. LIENS AND SECURITY INTERESTS. On and after
the Closing Date, except for Liens permitted pursuant to Section 5.9
hereof, (a) there is no financing statement outstanding covering any
personal property of any Company, other than a financing statement in
favor of Lender, if any; (b) there is no mortgage outstanding covering
any real property of any Company, other than a mortgage in favor of
Lender, if any; and (c) no real or personal property of any Company is
subject to any security interest or Lien of any kind other than any
security interest or Lien which may be granted to Lender. Upon the
filing of the appropriate financing statements, Lender has a valid and
enforceable first security interest in the Collateral and Term Loan
Collateral, subject to Liens permitted under Section 5.9 hereof. On and
after the Closing Date, neither Borrower nor any Subsidiary has entered
into any contract or agreement which would prohibit Lender from
acquiring a security interest, mortgage or other Lien on, or a
collateral assignment of, any of the property or assets of Borrower
and/or any of its Subsidiaries except for (i) the Note Purchase
Agreement, (ii) any contract or agreement in connection with any
Capitalized Lease Obligation or purchase money indebtedness or (iii)
any contract or agreement in connection with any financing provided to
a foreign Subsidiary of Borrower.
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71
22. The Credit and Security Agreement is hereby amended by
deleting Section 9.5 in its entirety, with the following being inserted in place
thereof:
SECTION 9.5. COLLATERAL; TERM LOAN COLLATERAL. Upon the
occurrence of any Event of Default, and at all times during the
continuance thereof, Lender shall have the rights and remedies of a
secured party under the Ohio Revised Code, in addition to the rights
and remedies of a secured party provided elsewhere within this
Agreement, in any other writing executed by Borrower or otherwise
provided by law. Lender may require Borrower to assemble the Collateral
and/or Term Loan Collateral, which Borrower agrees to do, and make it
available to Lender at a reasonably convenient place to be designated
by Lender. Lender may, with or without notice to or demand upon
Borrower and with or without the aid of legal process, make use of such
force as may be necessary to enter any premises where the Collateral,
Term Loan Collateral, or any thereof, may be found and to take
possession thereof (including anything found in or on the Collateral
and/or Term Loan Collateral that is not specifically described in this
Agreement, each of which findings shall be considered to be an
accession to and a part of the Collateral and/or Term Loan Collateral)
and for that purpose may pursue the Collateral and/or Term Loan
Collateral wherever the same may be found, without liability for
trespass or damage caused thereby to Borrower. After any delivery or
taking of possession of the Collateral, Term Loan Collateral, or any
thereof, pursuant to this Agreement, then, with or without resort to
Borrower personally or any other Person or property, all of which
Borrower hereby waives, and upon such terms and in such manner as
Lender may deem advisable, Lender, in its discretion, may sell, assign,
transfer and deliver any of the Collateral or Term Loan Collateral at
any time, or from time to time. No prior notice need be given to
Borrower or to any other Person in the case of any sale of Collateral
or Term Loan Collateral which Lender determines to be perishable or to
be declining speedily in value or which is customarily sold in any
recognized market, but in any other case Lender shall give Borrower not
fewer than ten (10) days' prior notice of either the time and place of
any public sale of the Collateral or Term Loan Collateral or of the
time after which any private sale or other intended disposition thereof
is to be made. Borrower waives advertisement of any such sale and
(except to the extent specifically required by the preceding sentence)
waives notice of any kind in respect of any such sale. At any such
public sale, Lender may purchase the Collateral, Term Loan Collateral,
or any part thereof, free from any right of redemption, all of which
rights Borrower hereby waives and releases. After deducting all Related
Expenses, and after paying all claims, if any, secured by Liens having
precedence over this Agreement, Lender shall apply the net proceeds of
each such sale to or toward the payment of the Debt, whether or not
then due, in such order and by such division as Lender, in its sole
discretion, may deem advisable. Any excess, to the extent permitted by
law, shall be paid to Borrower, and Borrower shall remain liable for
any deficiency. In addition, Lender shall at
[SIGNATURE PAGE]
72
all times have the right to obtain new appraisals of Borrower, the
Collateral or Term Loan Collateral, the reasonable cost of which shall
be paid by Borrower.
23. The Credit and Security Agreement is hereby amended by adding
Exhibit A-1 in the form of Exhibit 1 attached hereto.
24. As a condition precedent to the effectiveness of this First
Amendment Agreement, Borrower shall:
(a) execute and deliver to Lender a Term Note dated of even date
herewith, and such Term Note shall be in the form and substance of Exhibit 1
attached hereto;
(b) cause each Guarantor of Payment to consent, agree to and
acknowledge the terms of this First Amendment Agreement, and such Guarantor
Acknowledgment shall be in the form and substance of Exhibit 2 attached hereto;
(c) (i) cause each Guarantor of Payment, other than EAC, to
execute and deliver to Lender an amended and restated security agreement, in
form and substance satisfactory to Lender ("Amended and Restated Security
Agreement) and (ii) cause EAC to execute and deliver to Lender a guaranty of
payment of debt ("EAC Guaranty") and security agreement ("EAC Security
Agreement");
(d) execute and deliver, and cause each Guarantor of Payment to
execute and deliver, to Lender, Uniform Commercial Code financing statements
and/or amendments to Uniform Commercial Code financing statements, in form and
substance satisfactory to Lender;
(e) pay to Lender, on the date hereof, an amendment fee in an
amount equal to Twenty-Five Thousand Dollars ($25,000);
(f) deliver evidence to Lender, in form and substance reasonably
satisfactory to Lender, that the Elsinore Acquisition has been completed and
that all necessary documents or instruments have been filed with all appropriate
governmental offices;
(g) deliver to Lender copies of the Elsinore Acquisition
Documents, including all legal opinions delivered in connection therewith, and,
whereby, each of which shall allow Lender to rely on such legal opinion, in form
and substance reasonably satisfactory to Lender;
(h) deliver to Lender a good standing certificate for Borrower and
each Guarantor of Payment, issued on or about the date hereof by the Secretary
of State in the state(s) where Borrower or such Guarantor of Payment is
incorporated and, as to EAC, qualified as a foreign corporation;
(i) deliver to Lender a pay-off letter and Uniform Commercial Code
termination statements from any current holder of a Lien on the Elsinore Assets,
if any, other than the Liens permitted pursuant to Section 5.9 hereof;
[SIGNATURE PAGE]
73
(j) deliver to Lender evidence of any necessary consent by CIBC
Xxxxxxxxxxx Corp. to the Elsinore Acquisition;
(k) deliver to Lender an officer's certificate (i) certifying the
names of the officers of Borrower authorized to sign this First Amendment and
any Loan Document or other Related Writings to which it is a party, together
with the true signatures of such officers, and (ii) certified copies of the
resolutions of the board of directors of Borrower evidencing approval of the
execution and delivery of this First Amendment and any Loan Document or other
Related Writings to which it is a party;
(l) cause to be delivered to Lender an officer's certificate (i)
certifying the names of the officers of each Subsidiary authorized to sign, as
applicable, the Guarantor Acknowledgment, the Amended and Restated Security
Agreement, the Elsinore Guaranty, the EAC Security Agreement and any Loan
Document or other Related Writings to which it is a party, together with the
true signatures of such officers, and (ii) certified copies of the resolutions
of the board of directors of each Subsidiary evidencing approval of the
execution and delivery, as applicable, of the Guarantor Acknowledgment, the
Amended and Restated Security Agreement, the Elsinore Guaranty, the EAC Security
Agreement and any Loan Document or other Related Writings to which it is a
party;
(m) deliver to Lender a landlord's waiver, in form and substance
satisfactory to Lender, for Borrower's location at Ft. Lauderdale International
Airport, 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000;
(n) deliver to Lender revised schedules to the Credit and Security
Agreement, as necessary, in form and substance reasonably satisfactory to
Lender;
(o) deliver to Lender evidence of insurance on XXXXX 27 form, and
otherwise reasonably satisfactory to Lender, of adequate personal property and
liability insurance of Borrower and each Guarantor of Payment, with Lender
listed as loss payee and additional insured;
(p) deliver to Lender evidence satisfactory to Lender that
Borrower has a minimum of Two Million Dollars ($2,000,000) available under the
Revolving Credit Commitment for unborrowed Revolving Loans or Letters of Credit
on the date hereof;
(q) deliver to Lender an opinion of counsel for Borrower, in form
and substance reasonably satisfactory to Lender, including an opinion that no
consent or waiver is required to execute this First Amendment pursuant to the
Indenture, dated as of August 18, 1998 (the "Indenture"), by and among Borrower,
certain Guarantors (as defined in the Indenture) and State Street Bank and Trust
Company, as Trustee; and
(r) pay all reasonable legal fees and expenses of Lender incurred
in connection with this First Amendment Agreement.
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74
25. Borrower hereby represents and warrants to Lender that (a)
Borrower has the legal power and authority to execute and deliver this First
Amendment Agreement; (b) the officers executing this First Amendment Agreement
have been duly authorized to execute and deliver the same and bind Borrower with
respect to the provisions hereof; (c) the execution and delivery hereof by
Borrower and the performance and observance by Borrower of the provisions hereof
do not violate or conflict with the organizational agreements of Borrower or any
law applicable to Borrower or result in a breach of any provision of or
constitute a default under any other agreement, instrument or document binding
upon or enforceable against Borrower; (d) no Unmatured Event of Default or Event
of Default exists under the Credit and Security Agreement, nor will any occur
immediately after the execution and delivery of this First Amendment Agreement
or by the performance or observance of any provision hereof; (e) Borrower is not
aware of any claim or offset against, or defense or counterclaim to, any of
Borrower's obligations or liabilities under the Credit and Security Agreement or
any Related Writing; (f) Borrower is in full compliance under the Note Purchase
Agreement and will remain in full compliance immediately after the execution and
delivery of this First Amendment Agreement, the Elsinore Acquisition or by the
performance or observance of any provision hereof; (g) the representations and
warranties set forth in Article VII of the Credit and Security Agreement are
true and correct on and as of the date hereof; and (h) this First Amendment
Agreement constitutes a valid and binding obligation of Borrower in every
respect, enforceable in accordance with its terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency or other similar
laws affecting creditors' rights generally.
26. In consideration of this First Amendment Agreement, Borrower
hereby waives and releases Lender and its respective directors, officers,
employees, attorneys, affiliates and subsidiaries from any and all such claims,
offsets, defenses and counterclaims of which Borrower is aware, such waiver and
release being with full knowledge and understanding of the circumstances and
effect thereof and after having consulted legal counsel with respect thereto.
27. Each reference that is made in the Credit and Security
Agreement or any other writing to the Credit and Security Agreement shall
hereafter be construed as a reference to the Credit and Security Agreement as
amended hereby. Except as herein otherwise specifically provided, all provisions
of the Credit and Security Agreement shall remain in full force and effect and
be unaffected hereby. This First Amendment Agreement is a Related Writing as
defined in the Credit and Security Agreement.
28. This First Amendment Agreement may be executed in any number
of counterparts, by different parties hereto in separate counterparts and by
facsimile signature, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.
29. The rights and obligations of all parties hereto shall be
governed by the laws of the State of Ohio, without regard to principles of
conflicts of laws.
[The remainder of this page is intentionally left blank.]
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30. JURY TRIAL WAIVER. BORROWER AND LENDER WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE, BETWEEN BORROWER AND LENDER ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED THERETO. THIS WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR
MODIFY LENDER'S ABILITY TO PURSUE REMEDIES PURSUANT TO ANY PROVISION CONTAINED
IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT BETWEEN BORROWER AND
LENDER.
Address: 0000 Xxxxxxx Xxxx, Xxxxx 000 AIRCRAFT SERVICE INTERNATIONAL
Ft. Lauderdale International Airport GROUP, INC.
Xxxxx, Xxxxxxx 00000-0000
Attention: President By:
Print Name:
Title
Address: 000 Xxxxxx Xxxxxx XXX XXXXXXXXX CAPITAL INC.
Xxxxxxxxx, Xxxx 00000-0000
Attention: Manager of Structured By:
Finance Group Print Name:
Title:
EXHIBIT 1
EXHIBIT A-1
TERM NOTE
$5,000,000 Dania, Florida
May ___, 1999
FOR VALUE RECEIVED, the undersigned, AIRCRAFT SERVICE INTERNATIONAL
GROUP, INC. ("Borrower") promises to pay to the order of KEY CORPORATE CAPITAL
INC. ("Lender") at its Main Office at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx
00000-0000, or such other place as Lender shall designate, the principal sum of
FIVE MILLION DOLLARS
in lawful money of the United States of America in twenty-three (23) consecutive
quarter-annual installments, commencing August 1, 1999 and continuing on the
first day of each succeeding November, February, May and August thereafter as
follows: (i) for the period from August 1,
76
1999 through May 1, 2001, One Hundred Twenty-Five Thousand Dollars ($125,000),
(ii) for the period from August 1, 2001 through May 1, 2003, One Hundred
Eighty-Seven Thousand Five Hundred Dollars ($187,500), (iii) for the period from
August 1, 2003 through May 1, 2004, Two Hundred Seventy-Five Thousand Dollars
($275,000), and (iv) for the period from August 1, 2004 through February 1,
2005, Three Hundred Fifty Thousand Dollars ($350,000), with the balance thereof
payable in full on May 1, 2005. As used herein, "Credit and Security Agreement"
means the Credit and Security Agreement dated as of April 2, 1998, between
Borrower and Lender, as amended and as the same may from time to time be further
amended, restated or otherwise modified. Capitalized terms used herein shall
have the meanings ascribed to them in the Credit and Security Agreement.
Borrower also promises to pay interest on the unpaid principal amount
of the Term Loan from time to time outstanding, from the date of the Term Loan
until the payment in full thereof, at the rates per annum which shall be
determined in accordance with the provisions of Section 2.1C of the Credit and
Security Agreement. Such interest shall be payable on each date provided for in
such Section 2.1C; provided, however, that interest on any principal portion
which is not paid when due shall be payable on demand.
The portions of the principal sum hereof from time to time representing
Prime Rate Loans and LIBOR Loans, and payments of principal of either thereof,
shall be shown on the records of Lender by such method as Lender may generally
employ; provided, however, that failure to make any such entry shall in no way
detract from Borrower's obligations under this Note.
If this Note shall not be paid at maturity, whether such maturity
occurs by reason of lapse of time or by operation of any provision for
acceleration of maturity contained in the Credit and Security Agreement, the
principal hereof and the unpaid interest thereon shall bear interest, until
paid, at a rate per annum equal to the Default Rate. All payments of principal
of and interest on this Note shall be made in immediately available funds.
This Note is the Term Note referred to in the Credit and Security
Agreement. Reference is made to the Credit and Security Agreement for a
description of the right of the undersigned to anticipate payments hereof, the
right of the holder hereof to declare this Note due prior to its stated
maturity, and other terms and conditions upon which this Note is issued.
Except as expressly provided in the Credit and Security Agreement,
Borrower expressly waives presentment, demand, protest and notice of any kind.
JURY TRIAL WAIVER. BORROWER WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE
IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE,
BETWEEN BORROWER AND LENDER, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO. THIS
WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND
77
OR MODIFY LENDER'S ABILITY TO PURSUE REMEDIES PURSUANT TO ANY PROVISION
CONTAINED IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT BETWEEN
BORROWER AND LENDER.
AIRCRAFT SERVICE INTERNATIONAL
GROUP, INC.
By:
Print Name:
Title:
78
EXHIBIT 2
GUARANTOR ACKNOWLEDGMENT
The undersigned acknowledge and agree (a) to remain bound by the terms
and conditions of the Guaranty of Payment of Debt to which it is a party, and
(b) that the liability of the undersigned pursuant to such Guaranty of Payment
of Debt shall continue and remain in full force and effect. The undersigned
hereby consent to Borrower's execution of the First Amendment Agreement and
further agree that Lender may rely on this acknowledgment in entering into the
First Amendment Agreement.
IN WITNESS WHEREOF, the foregoing acknowledgment has been executed and
delivered as of May ___, 1999.
AIRCRAFT SERVICE INTERNATIONAL, INC.
By:
Print Name:
Title:
FLORIDA AVIATION FUELING CO.,LTD.
By:
Print Name:
Title:
DISPATCH SERVICES, INC.
By:
Print Name:
Title:
